those are the questions we need to answer, not a bit ridiculous debate about exactly what type of terrorist attack this was. >> the talking points were altered, he said. that is completely wrong. there is simply nothing to that. the extremist group we are most focused on and libya -- there are others. they are inspired by the same ideology that motivates al qaeda, whether or not they are directly affiliated. it is not a peer so at this time, but we're still gathering information on that. the issue on whether or not this is al qaeda -- there are a fair number of extremist groups that der -- are not affiliated. >> or the talking points changed? >> they were straightforward.

they were not changed. >> [indiscernible] >> he read them, i did not see them. there were three basic points. there was a demonstration that grew into a larger violent attack. very early, we are still trying to figure out what is going on. i forget what 0.3 was. we did not know who did it. to. point today we still do not know exactly who did it. it is not a peer it was preplanned. truck bomb and fall that was clearly an al qaeda planned attack. this was a group of armed terrorists and libya who in a matter of hours there together

and armed assault. but we are trying to figure out is what kind of terrorist attack it was. it is regrettable this has become so partisan and political when we have serious questions to answer. >> [indiscernible] >> time. we will get a chance to see it. anyway, we had time. we just did not have enough time to show it. apparently it takes half an hour. >> i think it was just for the chair and rankings on the key committees and subcommittees on armed services and pre tell. >> [indiscernible] >> kennedy -- i forget who the

others were. >> was morell in there? >>he was not. >> [indiscernible] >>there was somebody from the fbi. i forget his name. thank you very much. >> next, senators brief reporters on the attack on libya. then marcia fudge and the criticism of suzanne rise. after that preston obama and congressional leaders talk about the fiscal of negotiations. -- fiscal cliff negotiations. tomorrow, marco rubio is a speaker at a fund-raiser for terry branstad.

he has been mentioned as a potential republican presidential candidate in 2016. coverage of his remarks as 7:a 30 p.m. eastern on c-span. -- at 7:30 eastern on c-span. >> two days of nonfiction books, arthur panel's, interviews, and your calls, e-mails, and tweets. featured authors include reyna grande, joahn walsh, and christopher hitchens. live coverage saturday 10:00 eastern and sunday afternoon. >> david patraeus testified before a closed hearing on the

investigation concerning the consulate attack. following the hearing committee members spoke to reporters. >> so far seven hours of hearings, we have spent the last two hours with former director patraeus. he laid out his view, which was very much appreciated. he answered a large number of questions. we still have two additional hearings. hopefully the preparations of the findings and a public hearing. >> big two this was a terrorist attack within 24 hours? >> i will not comment now. we will most likely comment on those things in our final report. i think we have a ways to go

yet. i think they are trying to be very careful and cautious. >> [indiscernible] >> since you asked that question -- the roles of our committee are you cannot use something that you learned in a classified session. i can give you my assessment based on questions, my investigation, that what susan rice did was use talking points, pulled out originally by the cia signed off by the intelligence community, those were requested by the house committee. the intelligence committee sign off of it.

the key was there were unclassified talking points at an early stage. i do not think she should be pelerine for this. she did what i would have done or anybody else would have done that was going on a weekend show. you would have said what talking points can i use? you get an unclassified version. i just remember -- i just read it to the committee what i was going to tell you and questions asked. to be sure it did not violate our rules. this particularly is for people in public office because you are used to answering questions candidly to have to be restricted to what is unclassified. is very difficult for your

>> did he talk about his resignation? >> [indiscernible] >> i think it is making a very divisive -- we have seen wrong intelligence before. it all surrounded our going into iraq. a lot of people were killed based on bad intelligence. i do not think that is fair game. i think mistakes get made. the select ambassador rice because she used an unclassified talking. to say she is unqualified to be secretary of state i think it's

a mistake. the way it keeps going, it is almost as if the intent -- >> [indiscernible] >> no, not to my knowledge. the question was, was there a discrepancy between what she said and the cia talking points. i only heard directly one part on a television show where she used just the cia talking points. that is all i heard it. if somebody else heard something different. >> did the talking points change in our agency discussion where they removed it -- >> let me read the original talking points. the currently available information suggests the demonstrations in benghazi were

inspired by the protests at the united states embassy in cairo and it is of against -- into a in benghazi.lt and been gauz then it went on. this assessment may change as additional information is collected and analyzed and is currently information continues to be evaluated. that is clearly what happened. the investigation is ongoing. the united states government is working with libyan authorities to bring justice to those who brought death to united states citizens. it subsequently became available

to anybody i guess to ask for talking points, which the ambassador did. as i understand the process, the cia prepares additional talking points, which then go through the various components of the intelligence community. those components see their sign off on them, discuss them, and i believe the intelligence community signed off on the talking points. >> [indiscernible] >> not to my knowledge. >> why was there all the security today to protect the general patraeus >> the general was eager and willing to give us his views on this and the experience. that is very much appreciated

because of the situation. we did not want to make it more difficult for him. you people are not always the easiest. you can blame it on us, we wanted to spare him that. there is a lot of suffering going on. >> do you believe there were security lapses at benghazi. >> i will not give you any other conclusions at this time. >> what is your personal assessment? >> i have a personal assessment that will come out in our official report. i really want to leave it that way on everything accept for this one thing the because i really think ambassador rice has

been treated unfairly. >>did patraeus talk about his resignation at all? >> we were told in the opening statement he raised it. he regretted the circumstances. >> he did do that. >> yes. >> did you ask any questions about the situation and the national-security implications? >> nobody did it. >> [indiscernible] >> i have no evidence one way or the other. >> let me just say that we had a

very excellent hearing with general patraeus as always. he continues to be very direct, very forthright. as the only individual in a leadership position who has been back on the ground in libya since the incident occurred on september 11, it was very important to get him in. he did have a different perspective on things. he clarified some of the issues that were a little cloudy. it was a very good hearing with him. i am pleased the could be there today to talk about it. >> what exactly did he talk about? >> i cannot go into the classified issues that we talked about, obviously. there were any number of issues in this scenario because of the fact we are not on the ground, we do not have people back in the benghazi today even, there

are still a lot of unanswered questions. he had to clarify some of our outstanding. >> did you hear anything from general patraeus that contradicted what you heard yesterday from the cia? >> no. >> what were the biggest unanswered questions right now? >> we still have to determine, how did this group penetrate the facility that we had in benghazi and who were these people? we have a good idea now. are getting closer to determining that. we know there were al qaeda affiliates or al qaeda itself. and we know there has been training going on on the ground. it is delving into more depth on issues like that. >> did general patraeus say he

knew it was terrorists from the beginning? >> there was no question in the mind of anybody this was an act of terrorism from the get go. he did not have protesters coming to a protest or to demonstrate with ak-47s and other weapons, including mortars. there has never been any question about that. i did a press release on september 12 saying this was an attack of terrorists. >> why was it classified then? >> it was not that i knew of. >> why did susan rice go on the sunday shows and not say it was that? >> you will have to ask for that. >> why did the talking points -- >> there were some changes made to the talking points. there are still issues about the

talking points that have yet to be resolved. the problem with a wet susan rice said was not if she had talked to the talking points they were correct, they were. she went beyond that. she even mentioned under the leadership of barack obama we have decimated al qaeda. she knew at that point in time al qaeda was likely responsible in part or in whole for the death of ambassador stevens. >> we have received information the iraq government -- family of those who were killed by the terrorists should also be outraged. appropriate action should be

taken with regard to our relations with the iraqi government. meeting was comprehensive. it added to our ability to make judgments about what is a failure of intelligence. his interactions with other agencies -- i appreciate his service. >> [indiscernible] >> i cannot say because of security implications. i am very restrictive and what i can say. i consider the chairman and the ranking member -- because of the rules of the committee. the evidence very clear that ambassador rice used the talking

points that the intelligence committee had also signed off on. she used the unclassified talking points that were signed off on by the entire intelligence community. criticisms of her are completely unwarranted. that is very clear. >> are you able to say whether the cia called it a terrorist attack within the first 24 hours, and it did it include al qaeda? >> i do not think i should respond to that because of the questions as classification. what is very clear is that ambassador rice use the unclassified talking points that the entire intelligence community had signed off on. and so she did the appropriate

thing to it. there are other things classified. that is a totally different subject. i cannot talk about that now. >> did he contradict anything you heard yesterday? >> general patraeus as director of the cia has been completely consistent. so much of this confusion arises because of the difference between what is classified and what is unclassified. you hear people saying different things in different times. what is classified cannot be discussed publicly. it cannot be discussed publicly because it would reveal the

sources of gathering intelligence. it is very important to understand that when people are talking in classified setting, they can say much more a then then they can say in an unclassified setting. the notes that ambassador rise were speaking from was in an unclassified setting. we should know what is available in the classified way may be different than what is available in an unclassified way. she did the responsible thing answering questions based on what was on classified and.

it is critically important to understand. i do not want to go further. i thought it was an important for you to know the difference between classified and unclassified. that is why you hear things that seem at variants that may not be at variance at all. >> do you believe senator mccain and other republicans have the same understanding? >> i hope everybody would have the understanding now. >> [indiscernible] > >> the chairman and vice- chairman will be coming and making a statement. i think is so important that the character of the un ambassador

be clarified. it is our understanding from hearing two days of testimony that in fact what the un ambassador stated was the talking points that had been given approved declassified to the house intelligence committee. that is what i am told she restated. this member is absolutely convinced we are in it -- an accurate reflection of the intelligence community. that could be said at that time in a declassified manner. >> is the issue here that there were talking points that were classified --

>> there are many issues but i when the chairman and vice- chairman to speak as to the un ambassador. i will give a speech on the floor of the senate is still in session. >> we have gained important insights as to what has happened. i still believe there are questions that need to be answered. i think anybody with confusion in the basis of the two hearings, it is a premature conclusion. i am glad we have two morris sessions ahead of us. more people we need to talk to. it was helpful to have patraeus speak to us today. we are learning a lot. in my opinion we have not come to a. we can draw conclusions as to what happened. >> what could he not answer today? >> there are still issues out

there -- some of it is related to classified information. we have a commitment from the chairman and a consensus that we will continue to pursue the finances to some very critical questions that will give us insights as to whether it is engaged influence related to this. americans deserve to get the whole story. >> how was the director? >> he was forthright and received gratitude from us for his service to the country. we all regretted the incident that led to his resignation. we are grateful for his service. >> did he believe it was a terrorist from the beginning >> greater than i am not going to go into affirmation that is

really classified information. i will leave my statement that that. >> the he addressed the affair? >> no, the issue today was benghazi. we had a general patraeus talk about everything he knew from his engagement. >> [indiscernible] >> i am just going to leave it at that. >> the incoming chair of the black caucus says that sexism and racism played a role in the charges that senator john mccain and others have leveled at susan rice./ her remarks came at a briefing to defend the remarks regarding an attack on the u.s. consulate in benghazi. she has been cited as a possible candidate to replace hillary clinton as secretary of state.

this is about 20 minutes. to talk about the disrespectful attacks on the united states permanent representative to the united nations, susan e. rice. we have a distinguished member here who was in a committee meeting, delegates eleanor holmes norton. she must return to the meeting. i will yield the microphone to

occur before i introduce this group that has assembled here today. >> i appreciate the generosity of the chair of our democratic caucus. i appreciate particularly that you have brought us all together. while you see some of us here, i think i can say without fear of contradiction that we are speaking for many women members of congress and we are speaking for many members of congress regarding the treatment of ambassador susan rice. i happen to know her well because she is a constituent. i have that followed her extraordinary career from the time she was a child. some members of the senate seem to be able to contain themselves while we await the two ongoing investigations into the tragic attacks in benghazi,

libya that took the lives of four americans. instead they have rushed forward to try to shoot the messenger, prejudge the investigation, and blocked consideration of ambassador susan rice to be considered for secretary of state. they're following the oversight and government reform committee from which i sit at called a rare hearing in the middle of our recess and of the presidential campaign. republicans scoffed at the irrefutable evidence that ambassador rice relied on intelligence from the office of the national director of intelligence. at the hearing, i introduce the statement on the intelligence from the officer -- it from the

office of national director of intelligence which said -- i want to quote it for you. here is the intelligence director speaking. in the immediate aftermath, there was information that led us to assess that the attack began spontaneously following protests earlier thatwe providel assessment to executive branch officials and members of congress who use that information to discuss the attacked publicly and provide updates as they became available. we continue to emphasize that the information gathered was preliminary and involving -- evolving. i asked ambassador patrick kennedy of the state department

of, testified at the hearing, whether he had any reason to relied on the information from the national intelligence director. he replied -- "no, ms. norton. when i came up to give a briefing earlier this week, following a day or two later, by ambassador rice, both of us were relying on the same information. if i or any other senior administration official's career or non career would have been on the television show, other than susan>> but i'm close. srice, we would have said the same thing because we were drawing on the information that

was then available. >> this has been an evolving situation. what we knew that first week in the first weekend had evolved over time. we know much more now than we knew then." that should be the end of the case. we have no report from the ongoing investigations. there are two outstanding. we have the accusatory senators. we will as some have they bothered to look at this existing record. what motivates their pre-emptive judgment of a brilliant woman who has been a career diplomat, assistant secretary for african affairs, the youngest in history, whose record led her to her presidential appointment as un ambassador. in both positions, she has been

independent an undetermined by ideologies. she believed in the best interests of the united states. she advised the president that the u.s. should go into libya on the size of the rebels. susan rice has more than earned more than every office and honor she has received. , striving for and achieving top honors in high school academic in athletics in washington as a from stanfordolar university and a prize-winning ph.d. from oxford and a brilliant tough-minded diplomat. we do not intend to stand by while ambassador susan rice, who had nothing to do with this tragic attack, or its aftermath, is made the scapegoat of the tragedy because she relayed to

the public the only official intelligence that was available to the administration of the time. the rush to judgment against the ambassador is unprofessional and reckless considering that the intelligence documents her public remarks. we will not allow public servant record -- a public servant record to be caught up her nomination to be secretary of state. i appreciate being able to speak for susan rice. >> we have been honored to hear from a senior member of our caucus of the eleanor holmes norton. i am the co-chair of the women's study group -.

while all of the women who are scheduled here will not speak, i would be remiss not to note some of the distinguished people who are here. we have susan davis, a very high ranking official. she represents san diego, california. we have janice from california and barbara lee, who has become renowned and her outspokenness about the wars in afghanistan and iran. with a small group of women, she did lead the charge toward ending the war in iraq. we also have donna christiansen from the virgin islands who is here. and mrs. clark who is on the homeland security committee from

new york. we have heard a great deal from delicate eleanor holmes norton. i will give you the short and version of which she said. what unmitigated gull for these men to attack the permit representative to united states. all of us have been disappointed about the results of the election. becauseers this woman, they do not feel they have have the ability to batter president obama is something that we, the women, are not going to stand by. and watch. they are reckless speculation. it is unworthy of their officers

-- offices as it said. there was a time when our regarded mr. mccain as a gentleman. i am sad that this is not one of those moments. here we see this great senator rushing off to a press event rather than going to a briefing -- a closed briefing on the facts in his zeal to vent and to rant as a result of the ellection. the comment that she is not so bright and that she is untrustworthy -- these are comments that beg the question when you look at her laudable reza bay, much of which you heard from our distinguished delegates holmes norton.

we are asking for them to walk back those comments and joining me here -- i will stop my two- page, is at this point. i will call upon my good friend, the just-elected chair of the congressional black caucus, representative marsha from the 11th district of ohio. >> thank you very much. i will be brief as well. when you lose, you get angry. when you lose you are disappointed. do not take it out of someone who did not have anything to do. blame yourself. how do you say that a person with susan rice's background is not qualified? i wonder what your qualifications are for your job. where did you finish in your class? i know one of them to finish at

the bottom of their class. susan weiss was a rhodes scholar. how do you say she is not qualified? you may not like her? . she is the most qualified person i am sure any of you know that these centers know. how do you say that a person who has served his country with the distinction she has is not qualified? i am confused. none of it makes sense. susan rice's , send us to iraq and afghanistan. someone else's did. you are not angry with them. it is a shame that anytime goes wrong they pick on women and minorities. i have a real issue with that. i am not the most educated person in this house.

>> but i'm close. here. we are here to represent the people of the united states, to move this country forward, not to tear down. we are not here to make life difficult for people who work hard to do the job that this country has entrusted them to do. so for you who are haters as young people. your hate is going nowhere. but look in the mirror and hate yourself, not the people who are doing this work. >> it is the job of these senators to question policy but attacks are -- that's what you do instead of dealing with the policy issues. we have a very distinguished member with us, a good friend of all of us, someone who deals seriously with policy issues and is joined us today and that would be january from illinois.

>> also i think today of most significance i believe is my role on the intelligence committee. all of us were given a briefing based on emerging information from the intelligence committee. susan rice, i do -- susan rice went on television based on the information that was available at the time and the briefing that she was given information and intelligence that she had no part in collecting. the kind of statement that is anyone who had been given those briefings would have made in public. obviously, this was on an unclassified buys sis but she was given information that she had that has subsequently been updated. it was not wrong or deliberately misleading in any way. there had been the belief that there had been a protest that

developed into this attack. so susan rice as the president very clearly said, if anyone has a problem with the intelligence, they should take it up with the intelligence community and the president himself. he said come to me. and so to besmerge her incredible career and her stature and the words that came out of her mouth is completely inappropriate. and by the way inconsequential al. that is i've asked the question would anything had been different if the intelligence had been completely accurate at the beginning?

would there have been different actions taken in what turned out to be a tragic situation with the loss of the ambassador and other americans and the answer is absolutely no. so i'm a bit confused about the whole deal about this benghazi situation other than we all agree it was a tragedy that we had the loss of life. but it's interesting to me that we aren't discussing another rice who went before all of the sunday talk shows some years ago whose statements about false intelligence were based on more information than that held by susan rice about this situation. and talking about if we don't go into iraq now, then the next we'll here from saddam hussein is in the form of a mushroom cloud that really did move to us

consequential actions, 44'6" u.s. soldiers killed in iraq not to mention the other loss of life that occurred there. that really made a difference. and i would say that if you live in a glass house, don't throw stones. and there is no worthy reason to throw any stone at susan rice. >> very profound if you live in a glass house cast no stones. we've been joined by laura richardson from california. thank you for joining us here. this very unqualified woman of course spear headed efforts to bring the international sanctions against i ran,

sanctions on -- iran, sanctions on north korea and has brought significant to bringing down kadaffi. we now are going to hear from a very special colleague, terri sewell from the seventh district of alabama. she has very special insight into the qualifications and integrity of susan rice. thank you for joining us.

>> good morning. today i stand with my colleagues, proudly stand with my colleagues in expressing our outrage about the unfair attacks against the u.s. ambassador susan rice. these recent attacks are nothing short of offensive. nothing short of offensive. leading the charge to oppose ambassador rice are our senators who profess to want to block any potential nomination of this overly qualified public serve ant. and i for you cannot sit back like all of us and not say this is wrong. it's not only wrong, it's actually unpatriotic. to be clear, the attack on the american embassy in benghazi in which four lives were lost deserves to be investigated and the full weight of the american government should be used to finding and bringing the real cull patriots to justice. but to suggest that ambassador rice would knowingly and purposefully mislead the

american people is not true. this should not be for political and personal gain. i am outraged that these republicans could even suggest that this administration and that this chief diplomat would be come police to us in this tragedy. it's offensive and unpatriotic. he acted in good faith in reporting what she had been told by intelligence. she said quote based on the best judgment at the time. senator mccain's comments that ambassador rice is unqualified and not very bright is woefully untrue. with all due respect, senator mccain, i know susan rice. i have known her for 25 years. we were graduate students

together at oxford and i can tell you without the glare of washington politics that susan rice is a brilliant scholar, a renowned expert in her field, a woman of unquestionable judgment and tireless efforts to fight and be a servant on behalf of the american people. she has the character and the where with all if our president so chooses we could not have asked and would not ask for a better secretary of state than susan rice. not only is she a brilliant scholar, the first african- american value dick attorney in at the theater school in washington d.c. a road scholar, has won awards for her research in africa and foreign policy.

she has an exemplary career in the nation's service and one we should not sit by and let be tarnished. is she is a wonderful public servant but she is a woman of character and a person i am proud to call my friend and more proud to call my u.n. ambassador and would be even more proud to call her my secretary of state. so let us be clear it is unfair and i think unpatriotic to assume that the chief diplomat would woefully, purposefully mislead the american public. to be come police to us in this tragedy at all is offensive. i think we need to get back to the nation's business and finding the real cull patriots who took the lives of the four americans. we need to leave the full weight of the american government to find those cull patriots and leave ambassador rice alone to do her job.

let's get back to the work of the american people. >> as you can see there is a great deal of passion on this issue and to close us out it's going to be a good friend and colleague of ours from california who herself has had years of distinguished leadership in the california assembly as the speaker. mad dam speaker. and really understands leadership abilities and what they are. it's very difficult to recruit qualified women and senator mccain should know that. it is very difficult to find qualified women to do this work and when we find qualified women, we should not preemptively because the president hasn't even indicated he would nominate her. he has many choices.

we should not preemptively destroy the chances of women to serve us in this country. so i am introducing a woman who has distinguished herself. she's a member from california and serves on the foreign affairs committee and is formally the speaker of the house of representatives from california karen bass. >> good morning everyone. i am very proud to be here. today is a day that i feel great pride of being a member of congress and standing up here with these distinguished women all of whom have so many accomplishments and we've heard so much today about the career and history of susan rice. so i stand with great pride with my colleagues. we all know what the real deal is. we knew what this story was before the election. it was about trying to undermine

the election of president obama. after the election i think the real deal is our republican colleagues are disoriented and are in a tail spin since the election. they want to shoot, they don't know who to shoot or where the target should be so right now the target is on the back of susan rice. this has been very clear. i think you heard from my colleagues today specifically why there is no basis to the notion that ambassador rice would deliberately mislead the american public. you have to ask yourself what could she possible gain from doing this. what the republicans are accusing her of is completely inconsistent with her 20 plus year history as a diplomat. all of her accomplishments both academic and professional. i'm afraid my republican colleagues are trying to build a narrative in an attempt to derail a potential appointment to the state department, and an appoint. i might add that hasn't been proposed yet.

we know over the last two years the number one goal of the republicans was to prevent the president from being re-elected. they failed t. message from the voters was for us to work together. we should be dealing with the fiscal issues facing our nation. we should be getting to the bottom of what happened in benghazi and what we need to do to protect the over 300 diplomats serving our nation around the world. and congress needs to make sure the state department has the resources to protect our diplomats. ironically my same republican colleagues wanted to cut money from the budget that could have been used to protect diplomats and now they're concerned about this. our first order of business should be to prevent a fiscal crisis. if one occurs it will be because of our inaction. a fiscal crisis could take place.

in january president obama will be sworn in again. the message from the voters is for us to work together. my republican colleagues over the holidays need to do some soul searching and ask themselves do they plan to spend the next four years chasing ghosts in an attempt now to derail his presidency? they should stop trying to smear and incredible academic and professional record. i'm waiting for donald trump now to ask for her transcripts. we have to stop disrespected ambassador rice with the false implication that she deliberately misled the public. we will not stand for this nonsense any longer and negotiate will the american public. thank you very much. >> that's our message and we'll take any questions but again we want them to take that back. take back those words smearing her incredible accomplishments, the not so bright in particular, untrustworthy, how dear them. thank you. -- how dare them.

>> yes, ma'am. >> you said that any time or one of you said any time something goes wrong they pick on a woman and a minority can you elaborate on that. do you feel there is a degree of sexism and racism in their comments 1234 >> there is no question about it. all of the things that they have disliked about things that have gone on in this administration, they have never called a male unqualified, not bright, not trustworthy. i don't recall that ever happening.

they didn't even say that about general petraeus they are all up in arms about. so there is a clear in my opinion sexism and racism that goes with these comments being made by senator mccain and others and i strongly stand by that statement. >> yes, ma'am. >> even if she's not necessarily at fault for the information she was given, do you think the negative reactions of some make her too radio active to have a viable shot at making it through the nomination process? >> i think they're trying to pre-empt that discussion but the reality is if you look at her record and her accomplish lts and her contributions to this nation, anybody who looks at that record and has a fair discussion with her would come one different conclusions. >> with all of the statement that is senator mccain has made, very negative ones about this administration and about susan

rice, do you think he's not qualified to be a senator? >> yes, sir. >> if susan rice wasn't the only one that spoke about this, the president spoke about it and others spoke about it. if president obama did in fact mislead the country on this, what do you think congress should do about it? >> that is a speculation. we don't know. we are all trying to find out what the facts are. and senator mccain doesn't know what happened. i think that what we are dealing with right at this moment is a signal from senator mccain that they are not going to cooperate with the second administration of barack obama, that they are going to stall out

all of his nominations. this is their warning shot that they are going to filibuster her appointment and perhaps anybody else's. i think that's what it is. and here is the intelligence committee member. >> again, i'm really confused. the only point in contention really is whether or not this attack emerged from a protest and as soon as the information became clearer and it did take some time for that to happen, then that was perfectly clarified. there is absolutely -- it's inconceivable to me for anybody to speculate there would be a deliberate misleading of the american people. why would there be?

it's perfectly inconsequential al. there was a spontaneous demonstration and the terrorist groups organized to take opportunistic advantage of it or not. in any case, there is no advantage to mislead the american people in that regard. i mean you have to have motivation behind it and there is none. and as soon as the intelligence became clearer and as a member of the committee, i was told exactly that, that there was this administration and there were actually 12 different sources that thought that was true and that it came out that it actually wasn't and so we were briefed on it. but you have to have a reason for thinking that there would be a misleading and there isn't

one. [inaudible] >> we were told that it appeared to be elements of terrorist organizations i think that the document, the unclassified document which the house intelligence committee asked for used the word extremist which the analyst believe is synonymous. the analysts believed is synonymous with terrorists. if you want to get into semantics about it, yes, that was from the beginning talked about as a possibility. as more information came out, that was part of the reporting.

>> next, remarks concerning the fiscal cliff negotiations from president obama followed by a form on the issue with alan simpson and bowles. >> for the last half century, the discussion of the assassination has been dominated by two schools of thought. i will very briefly describe each of them and how they approach the evidence in the case. to begin with, there is the church of the lone assassin whose inherent insists they were alone nuts who murdered john kennedy and lee harvey oswald for their own personal reasons. on the other side we have the church of the grand conspiracy. they are vague about exactly what they thing did happen and who was responsible.

but there are commenced there was a large conspiracy, usually involving figures within the government, and a mass of cover up. >> this weekend, 49 years later the questions remain, lone gunman, the mob, cia, castro, the military industrial complex. what happened in dallas? sunday at 7:30 eastern. president obama says he and congressional leaders have urgent business to do mentioning tax rates for the middle class and job creation. the statement came before a meeting with congressional leaders at the white house.

>> i want to welcome the congressional leadership here and thank them for their time. i think we're all aware that we have some urgent business to do and we got to make sure that taxes don't go up on middle class families, that our economy will remain strong, that we're creating jobs and that is an agenda that democrats and republicans and independents, people all across the country share. so our challenge is to make sure that we are able to cooperate together, work together, find some common ground, make some tough compromises, build some consensus to do the people's business and what folks are looking for and i think all of us agree on this is action. they want to see that we are focused on them, not focused on our politics here in washington. so my hope is that this is going to be the beginning of a fruitful process where we're able to come to an agreement

that will reduce our deficit in a balanced way, that we will deal with some of the long-term impediments to growth and we're also going to be focusing on making sure that no class is able to get ahead. i want to thank the leadership for coming. with that, we're going to get to work. thank you very much, everybody. appreciate it. excuse me, there is actually one other point that i want to make and that is that my understanding is tomorrow is representative boehner's birthday. for those who want to wish him a happy birthday, we're not going to embarrass him with a cake because we didn't know how many candles were needed -- >> yeah, right. >> but we do want to wish him a happy birthday. >> thank you. >> thank you, everybody. appreciate it. >> house and senate leaders spoke briefly to reporters.

>> good morning, everyone. we had a very constructive meeting with the president to talk about america's fiscal problem. i outlined a framework that deals with reforming our tax code and reforming our spending. i believe that the framework that i have outlined in our meeting today is consistent with the president's call for a fair and balanced approach. to show our seriousness, we have put revenue on the table as long it's accompanied by significant spending cuts. while we're going to continue to have revenue on the table, it's going to be incumbent for my colleagues to show the american people that we're serious about cutting spending and solving our fiscal dilemma.

i believe that we can do this and avert the fiscal cliff that is right in front of us today. harry. >> this isn't the first time that we have dealt with these issues. we feel we understand what the problem is and we felt very -- i feel very good about what we were able to talk about in there. we have the cornerstones of being able to work something out. we both have to give up some of the things that we know are a problem and so it's like when we arrive at a point where we all know something has to be done, there is no more let's do it some other time. we're going to do it now. i think we feel very comfortable with each other and this isn't something we're going to wait until the last day of december to get it done. we have a plan. we're going to move forward on it and we're going to work during the thanksgiving recess. we're going to meet with the

president when we come back the first week, at least that's as i understand it. i think it was a very constructive meeting. i feel very good about what we were able to talk about. >> it was a very constructive meeting. we had a recognition that every person in america knows that we must reach agreement. we had, the speaker spoke about a framework going into next year. i was focusing on how we send a message of confidence to consumers, to the markets in the short run, too. that is to say that we should have a goal in terms of how much deficit reduction. we should have a deadline before christmas. we should show some milestones of success so that confidence can build as we reach our solution because if we do not reach agreement, not only will we miss the opportunity for doing something good for our economy and lifting the spirits and the confidence in our

country, we will have an economic downturn that must be avoided. we understand our responsibility there. we understand that it has to be about cuts. it has to be about revenue. it has to be about growth. it has to be about the future. so as we cut investments and as we talk about revenue, we have to do so in a way that promotes growth and supports the future. it was good. i feel confident that a solution may be in sight. mitch. >> i can only echo the observation of the other leaders that it was a constructive meeting. we all understand where we are. i can say on the part of my members that we fully understand that you can't save the country until you have entitlement programs that fit the demographics of the changing america in the coming

years. we're prepared to put revenue on the table provided we fix the real problem, even though most of my members, i think without exception believe we're in the dilemma we're in because we don't tax too little, we spend too much. i had a chance to talk to the president yesterday about his trip to burma, a country that i have had a long-standing interest in over the last 20 years. i want to commend him for going. i think it's an important step for him to take. thank you. >> thanks, everybody. >> activists also bed with the president and vice president and spoke to reporters after the meeting. -- also met with the president and vice-president and spoke to reporters after the meeting.

>> let me say we just concluded a meeting for over an hour with the president and vice president with a very rigid various organizational heads. it was a candid meeting. we discussed our concerns about of the constituencies that we represent, working-class people, poor people, minorities, students. we laid out to the president exactly the feelings we get from many areas of the country that are wanted in the middle of these fiscal cliff negotiations that he hears from our constituents. foursome that we represent, it is a fiscal clifford. fort some it is their sliding down from a more comfortable

slope. we are joining many across the partisan aisle to say that we would hope there is a passing by the senate and an agreement in negotiations that they go ahead and stop any hike on taxes to the middle-class and working- class. that has already been agreed on in the house and has been collectively agreed on by all groups as well as the house of representatives. let's start with what we agree with so that people despite their political and partisan views can face the holidays without an increase in taxes on middle-class and working people. at the same time we do not want those vulnerable to be on the chopping block of any move

towards what has to happen by the end of this year. i think the president heard us loud and clear. i think the president was open and very generous with hearing from each and every one of us. i think the collective message and consensus was let's build on where we already are. middle-class people, working class people should not be facing these holidays not knowing whether or not they will be facing an increase in taxes by the end of the year. it is a cliff for them. it is on a slide it down a slope for others. but the slope be what we wait for. let the middle class be avoided immediately. >> but me reaffirm all of us had

a positive meeting with the president. the president was in a great mood and very optimistic and positive. the most important thing right now for our constituency is to avoid any increase a denture tax rates for middle and working- class americans. it would have an average hit of about $3,000 per family, which for somebody making $50,000 a year is quite devastating. we understand the vulnerabilities of people -- it has been emphasized and affirmed by the tragedy in the northeast with hurricane sandy. secondly, we all believe a in the context of this that the human investment programs that

support and sustain the working class and poor americans should not be the sacrificial lamb in any discussions. those programs have already been cut, been reduced to an extent. we are very unified in our thinking. thirdly and finally, we stand here, yes, as representatives of the organizations and the constituencies that we work for. we stand here as americans with a sincere hope the men and women in this city can find common ground. we know they can find common ground if they all exercise good will. if they exercise a commitment to common ground. we think that is one of the most important messages. a sincere feeling that we expect

leaders to find common ground. we think the president for having us today and his out reach efforts have been extraordinary. i will introduce sister and then janet and we will go from there. >> i am sister samone. you probably know me -- it was a big honor to be in the meeting today. i think what i take away is the awareness, commitment, and knowledge of the structure -- the struggle our working folks have in the united states. he understands you can work for middle-age -- minimum wage and still be in poverty. his commitment to ensuring working-class families are protected in this process is

really at the heart of it for us. it is at the heart of it for 100% of our nation. he was so clear that we have to come to a resolution on this issue. all of the issues we care for our coming together and this one of moment. i lift up the negotiators on all sides of the aisle to make sure we, the people of the united states, find a way to settle the issue to free our economy from this brinksmanship and make sure those in the middle class and the working poor are cared for. those who struggle every day in our society to make us the wonderful nation that we are are affirmed and this way. that we have a way forward. i see the president's commitment. i heard all of our commitments. we have to make sure the third voices are the ones who triumph. >> my name is janet.

it is also an honor for me to be a part of this meeting with so many distinguished leaders who are at the forefront of fighting for so many working families. also, knowledgeable and the fact we worked very hard to turn out a lot of votes in this election. we want to make sure people understand it is because we care about the issues. one of the most of port issues facing our country is one of our constituents cared about, the state of the fiscal health, the economy, and we had a productive meeting with the president. i was very pleased with the commitment he made to stand firm and make sure we would not tax working families and middle class families as we move forward. that is not something we -- that is something we very much care about. we want to make sure the principle that we protect the

vulnerable. that is also upheld. we saw a confident president who extended to us a hand in saying we need to continue this work together. the election may be over, but the issues are at stake for this country. as latino voters, we carry about the future of our fiscal health of the country and we have an interest in making sure we have a deal fare as it relates to tax reform and entitlements and as it relates to the budget. i am very encouraged by what we heard from the president today. i know there is a strong sense of unity by the leaders here today and our constituencies to fight hard for a budget bill. thank you. >> these are not just for us political issues, they are religious. despite the narrowness of the

media's focus on what the religious issues are, sometimes, some of the biggest faith issues involve this election as of how jesus said we treated the least of us or how we treated the stranger. i want to change the conversation to the fiscal soul of this nation. what is the fiscal soul of this nation? what kind of people are be going to be? the circle of protection is people who voted differently in this election. catholics, evangelicals. we are saying a principle is that deficits are moral issues and how we resolve them is a moral issue, too. you cannot resolve a deficit by increasing poverty. we will be reaching out as we always do to poor people. we will say to our political leaders, do not make decisions

fiscally that make the port for. that make our jobs even harder. -- make the poor poorer. this is a broken political system. we have some of for so many years. how do we make a path to fiscal sustainability that includes us all? that is what we are talking about here. how do we make a path that includes all of us here. we will be calling to people who vote different ways, but we was a our principal from the community is you judge a nation not by its military firepower or its gross national product but how it treats the most vulnerable. that is how we judge in nation. that is how god judges nations. we will come together and make sure all of us are a part from where we go from here. this is a debating about the fiscal soul of a nation, not

just a fiscal cliff. >> hello. i am the president and ceo of the naacp. we are in tough times. these remind me of when my grandmother used to say about how the farmer calls for all of the farm to pitch in to make breakfast. it comes down to eggs and legs. you ask the chicken to pitch in, that is easy. if you ask the lamb to pigeon, that is harder. we are here to advocate for the lambs in this equation. step by step we will get through the hard times. the next step has to be that congress steps up and finally passes this bill that has already passed the senate. the president is ready to sign it. to ensure we preserve the tax

cuts for the 98% of us for whom this is a leg a question. 98% of us who cannot afford to give up a thousand dollars this christmas. it would be disastrous to our economy. it would be a tragedy for many families. it would punish families further toward foreclosure and it would create joblessness very quickly. we need the republicans to really dig deep and to think hard and to pull back from the cliff 98% of our families for whom this is a leg question. talking with the president today was heartening. it is clear the values of this nation spoke clearly next tuesday. there is reason to be hopeful. we have to now focus on taking it to the next step and that is to ensure that a bill gets to

the president's desk that protect a 98% of us to really make up the bulk of this nation from our taxes being raised. thank you. god bless. >> hello. my name is karen a smith. we are a-- aaron smith. we are a national youth advocacy. obviously, we came off an election where young people were engaged and they came out to vote in big numbers. it was clear that the president was listening to young people and had young people in mind when he talked about the future of the middle-class and thinking about future generations. i think the president made strong points about how we need to invest. how we need to deal with deficits could enter a balanced way. looking at the middle class tax cuts which do impact millions of

young people in school and those out of school and the unemployed. we also talked about the impact of all of the programs out there a denture education and job training that really mean so much to young people in terms of having a pathway to the middle class. it was a positive meeting. i was encouraged to see the president listening to the concerns and voices of young americans. >> good afternoon. i am the chair of the national council of asian pacific americans. my message to the president today was that asian americans, native hawaiians are listening. 73% of our community members voted for the president. the issues they care about are the issues that affect all

americans. health equity, immigration, education reform, and the state of the economy. what the president conveyed to us is a vision of shared prosperity. those of us who can give more to give more, those who are working class families and who are been a class families should not be under attack. the individuals who are depending on programs to make sure they can continue on their daily lives, the programs are not gutted. that is the vision and the image of shared prosperity that really affects all of our constituencies. it was a constructive meeting. i think we all felt our issues were being heard. we understand moving beyond the economy weaken also addressed issues of immigration, education, and other issues that concern us. >> the ceo of aarp.

there are two things that are priorities for all americans, not just financial security and health security. you have heard the conversation about the middle-class, strengthening the middle class and keeping those who are poor from falling off of the cliff into deeper poverty. we have had a vibrant conversation around health-care, continuing social security, and having social security not really being considered it part of the discussion but to focus on how to strengthen social security for current and future generations. healthcare, a number of conversations associated making sure that medicaid and medicare are available. we will continue to have those conversations. the president has been focused on making sure the americans continue to have both the security on the health side and

the financial side. >> thank you. good afternoon, everybody. i am the president and ceo of the leadership conference on civil and human rights. i was honored to attend a meeting today with the president joined by my colleagues representing america today. representing a cross section of the american people. we were here to express our unity with the president's vision of shared prosperity. i will leave you with a simple message. we argue it would be detrimental to the nation, to the economy, to the american people if we raised taxes on the middle class and most vulnerable, particularly as we are going to enter the holiday season this year. that is a message we share with the president. we believe the efforts that have been undertaken by the senate of the united states that are pending at enter the house of

representatives to make sure taxes of the middle class and the most vulnerable are not raised is a message we left with the president today. thank you. we look forward to your questions. >> we will be available for one on ones. thank you for coming. >> and a form on the fiscal cliff, the former chairs of the deficit panel criticized for not adopting the recommendations. we hear from simpson and bowles. other participants included alan greenspan and paul volcker. >> how many of you know how many lives have been put into this >> there is no way we can thank you enough. [applause]

>> all of us involved in this effort, all we stand on the shoulders of pete peterson. >> i started with this marvelous man over 30 years ago when he said the have to do something about the solvency of social security. then we did that cda -- danfort thing. he wrote a beautiful book. persistence, loyalty, patriotism. he takes a lot of flak but he is a prince. >> i have chatted with the two of you several times when the commission first started.

i could easily sit here and listen to you talk about these issues. but i wanted to get your sense of where we are now. as we speak, the president is meeting with john boehner, the first face-to-face talk. in december 2010, you called your plan the moment of truth. almost two years later, but moment are we at now? >> i think this is the magic moment. a moment when our generation has the chance to really do something about this problem that we created. it is our generation that got us into this mess. i think we have a good chance. yet a second term democrats president who has come out and said he is willing to put entitlements on the table. big deal. you have a speaker, a republican speaker who really gets it. he understands the deaths of the problems they face.

he has said the are going to put revenues on the table. big move. we got half the members of the senate already saying they will support a balanced plan. which makes a lot of sense. we have the business community lined up firmly for doing something. most importantly, we have the fiscal cliff. where if we go over it, we are going to face the most predictable economic crisis in history. for all of us in here, it is also the most avoidable. i think this is the magic moment to get something done.

>> senator simpson, we never talk of compromise. there is still division here. >> it seems to me to have taken the word "compromise" up a step. three years ago the word was we do not know the word "compromise." if you cannot learn to compromise an issue without compromising yourself, you should never be in any legislature and you should never marry. [laughter] the only troubling thing i see here really troubling is you have democrat leaders -- and do not forget the leaders have not helped us at all in any effective way. they listen to us and they tell their position, but they have not been out there. what is disturbing to me is the word maybe the democrats could gain if we do get off the cliff. that is out there, and then the republicans say maybe we can gain if we go over the cliff. i think that is disastrous to even think in those terms. erskine says that is like betting your country. i am not quite as warmed by it all, and a couple of years ago you were the guy who said we were going over the cliff, and i said, no.

>> i think we cannot be stupid enough to do it. we can resolve this problem now by making some very tough, but doable, compromises. if we go over this cliff and we do not reach a deal immediately thereafter, here is what will happen, and that is about a 1/3 probability that we will go over the cliff and nothing will happen. what will happen is you will see moody's and fitch downgrade our credit. you will see a stock market that will say we never thought these guys would be stupid enough to do this. you will see a stock market that will really crash, and you will

see businesses really slow back on hiring, they will flow back on their capital expenditures, investments. you will see consumer confidence go down, and we will be facing a mess, because what happens, the economic effects of going over this cliff, are enough to slow economic growth by about 3%. we are only growing at 1.5% today, so that is enough to put us back in recession. about 2 million people will lose their jobs and unemployment will go back to 9%. why would we do that when there are good alternatives that we can do compromises now during the lame-duck session? >> a compromise is out there on the table. have things changed in the time that even simpson-bowles is not the right answer now? >> there are certain things that have to be adapted, but what i get a kick out of is there was chuckling. dick durbin and tom coburn have

been tremendously an integral part of this. they really are superb men, and bright and patriotic, and of course the stereotyping is out there, and that hurts everything. they say is durbin part of your plan? oh, god, not him. coburn is part of your plan? not him. they are not laughing now. this is like a stink bomb in a garden party. they do not like it. it is a curse, and the real estate guys and everybody on that list of people that gain tremendously from tax expenditures are out there with their fangs out right now. we knew this would come, but

they never dreamed they would be talking about this plan, and now they are not just talking about it, they are talking about implementing parts of it, and they are in shock. you ain't seen nothing yet if you do not think the savagery in the next few weeks putting the heat on these guys in congress, from everyone of those people are going to lose when we dump all the tax expenditures and give the people of america what they needed, a tax code with a flat 8%, up to 70 grand, up to 2010, it is all there. it is all in a 64-page report, and it is still there and it is not going away. >> our hope is during the lame duck you cannot rewrite the tax code in 48 days. for us, the american people should really be disappointed, why the rest of the country has been having what at best can be described as a very fragile economic recovery, in washington all they have been having is an election.

any business, if they were facing the equivalent of a $7.2 trillion in deficits, and that is what we have over the next decade, that is what the economic effect of this will become, the expiration of the bush tax cuts, the payroll tax, that patch that was put on the amt so it won't hit the middle class, the expiration of the unemployment benefits, the sequester, which was a mindless, senseless across-the- board cut came across because the failure of the supercommittee, and no business tries to balance their books doing it across the board. you do it surgically and try to do things that have the least adverse effect on productivity. today we got 48 days left, and went through this election. isn't it amazing that during the election, at all four of the

debates, the words "fiscal cliff" were not ever mentioned. >> no one mentioned the solvency of medicare. to think the debate took place and nobody ever got into those two big things that are driving this country. >> every day, every news organizations say "in 48 days," "47 days," and what is the senate doing? the senate went home. they are going to only work 20 days. if this was a business, all hands would be working and trying to resolve this issue. our best hope is to get some kind of framework deal that will call for $4 trillion worth of reduction over the next decade, but it has got to have real substance and real clarity for the markets to think it is real, it is going to have to have been a significant down payment, it is going to have to have a real timeline, and it will have to have a fail-safe

provision that is realistic, not one that somebody is going to try to walk away from this sequester. i would say it has to have somewhere around 67 votes in the senate to override it, so it will be hard for these guys to squirm out of it. >> you think that dividing lines have already taken place. if speaker boehner and the president continue to butt heads over the ideas of raising this tax rates for wealthier americans, extended the bush tax cuts, how do they reach the middle ground? >> tax rates for wealthier americans are going to go up. that is just a fact. that is going to happen. what we should be talking about is how can we do it where it has the least adverse effect on productivity here in this country, where it has the least adverse economic effects.

whether you do it by rates or by reducing the spending and the tax code, you are going to have to do it. it could be a combination of one or the other. i will give you examples, you could check the value of tax expenditures at 20% and then measure them down to 0% for the most wealthy, and that would generate the same amount of revenue as raising the tax rates to 39.6%. you could put up this thousand- dollar cap on tax expenditures. 91% of the money would come from people who make more than a $250,000, and would be progressive, because most of the money would come from the top 81%. it is very progressive. there are lots of way to skin a cat, but what be got to do is talk about it because they are plenty of options.

the point is we will have to have some revenue, but you got to talk about cutting spending, because that is the biggest problem. we had about $1 trillion of revenue and $3 trillion of spending cuts. >> remind us if you can about the medicare changes, the entitlement changes you talk about in your plan, and now republicans are saying have to be part of the conversation as they meet at the white house today. >> it is not just simpson- bowles. it's domenici-rivlin, and pete domenici and alice rivlin did a wonderful job. there's a lot of stuff to play with. no need for further hearings of any kind. i thought what was an interesting thing in the tax expenditures, 1% of the american people use 25% of those, and 20% of the american people use 80% of them.

figure that baby out, and guess who is getting the end of the pie. 20% of the american people are getting 80% of those 180-plus babies, put in there by most of the skilled lobbyists at the most appropriate time of social engineering, and only 27% of the american people itemize, so 3/4 of the american people never heard of that stuff. who is howling? "home mortgage interest deduction -- what is going happen to the housing industry?" it will survive because we said take it. who is benefiting from a million bucks in home mortgage interest deduction? we set it to $500,000, and then get a 12.5% non refundable tax credit to everybody, which helps the little guy.

if everybody would quit talking about the little guy, the little guy is the guy that is going to get hosed in this process if you do nothing. there is not any question about who is to get it. when the tipping point comes and they say you are dysfunctional and we want more money for our money, we know you are addicted, you have borrowed $16 trillion, so we know you want more. you borrow $3.6 billion a day, and 41 cents every day on every dollar you spend. we are going to get your money, and an interest rates will go up, and guess who gets hammered? the middle class. the fakery. >> you have some groups, and you've heard complaints, including the charitable community, very worried about what happens. how would you handle that? >> we tell them to read their report, which is a sick idea. everything failed -- read this.

it is 64 pages. it is in english. all these are sick things to look at, and you take a charitable deduction, you put a limit on it, and give him a 12.5% non-refundable tax credit. we knew we would be savage and we know it has got to get much more intense because when we put this baby in, these groups that together and just laughed. they had a chuckle. ha-ha. it ain't funny anymore, and now they are really, really smoked. >> people in this town talk about the need to get rid of earmarks. earmarks are $16 billion in the appropriations bill, but compare that to the earmarks in the tax code. that is $1.1 trillion a year. that is what they are not talking about.

we have to get serious. we have got about $2.3 trillion worth of revenue coming into the country. we're spending about $3.6 trillion. we got about a $1.3 trillion deficit, and this goes on as far as the eye can see. we have got to grow up. america has got a real problem. if we do not change, and we just take the theory and stick our heads in the ground, it will not be long before all america will be able to do is take care of a couple of old coots like me and al and buy a few tanks. if you like education, if you think we should be investing in research, if you think we should be doing something about this $4 trillion of deferred maintenance we have on our highways and bridges, then we'd better grow up, and we better understand that we have got to make some cuts throughout this budget or we will not be able to invest in anything that america has to invest in to be competitive in the future and in a knowledge- based economy.

>> something has changed since december 2010, and that is the kind of support you're getting from some in the business community. are you satisfied with the level of support, and are those business leaders going far enough in offering specifics, what they are willing to sacrifice, whether it is corporate tax rates that may have to fall by the wayside? >> i will say it again -- we would not be here if it was not for the peterson foundation. they laid the groundwork. we stand here on their shoulders, but they made it possible for us to have a voice in this matter because people were prepared to listen. so al and i did help form this fix the debt campaign.

i hope everyone will go to our website, which is fixthedebt.org. we have over 300,000 people that have already signed a petition, trying to tell congress, please get back to work, stay there, get a balanced plan, put our fiscal house in order. we have close to 100 ceo's today who get it. they know if we go over this cliff and we do not get a deal that we are likely to go back into recession. they want some clarity. they want to be able to understand what their future tax rates are going to be. they want to be able to plan. right now capital is on strike.

when capital is on strike, you are not going to create any jobs. that is why they are saying, wake up. we are prepared to make sacrifices. we are prepared to do our part, but we have also got to address the spending side of the equation to get rid of these debts. >> do not forget the extraordinary progress of dave cody. he said, "who are you people? is this the way you run your government?" he is tremendous. but the real escape hatch that i have noticed is people come up and say i am ready to do something if everybody else will because they know the escape hatch. >> you know what this reminds me of?

i just finished five years as the president of the university of north carolina, and there was a nobel prize-winning scientist and his nobel prize-winning project was running out of money, so he turned to his team and said, we are running out of money and we have got to start thinking. that is what america is. we are running out of money, and now we have got to start thinking. we have to make the hard political choices. if we do, we're going to be able to compete and win against any nation, but if we do not, we're going to stay on this path and become a second-rate power. my generation got us into this mess. we have got to get us out. we cannot wait until the next generation. >> you have the president and john boehner in the room. what is the advice you give these two men as they begin these conversations? >> sit down, have a beer, quit joshing each other, quit listening to the babble from the right and the left, saying we're throwing the old lady off the cliff in the wheelchair -- [laughter]

i meant grover. watering the earth in his white robes, telling people they raised taxes. that was a freudian thing there. what can grover do to you? he cannot murder you or burn your house. the only thing he can do to you is defeat you for reelection or put some jerk in the primary, and if that means more to you than the country, you should not even be in the damn congress. [applause] >> your advice? >> compromise, do the right thing. now is the magic moment. it is our responsibility. >> i want to thank you both. we are out of time. the conversation is going to continue here at the summit.

thank you again for joining us. thank you to the two of you. i appreciate your work as well. we will be right back in just a moment as we continue here at the fiscal summit. [applause] >> you help with this some major economic events in your careers.

what would be the impact on the economy if we go over the cliff? what if policymakers kick the can down the road for several months but failed to address the gap between revenues and spending policies and fail to stabilize the long term debt? >> i think may be too much is made over the cliff business. we will not solve the long-range problem in the next seven weeks. it will take some time. we have to deal with the short run problem. we have the big sequester and tax increase. that has to be dealt with in terms of the immediate economy.

i think that can be done. that will take some action on taxes and spending. it will not be the action that cures the longer-term problem. that will take some time. it will take some time to redesign the tax system and put restraints on spending that will deal with the deficit over the years ahead. >> you, dr. greenspan? >> i agree with paul. there are two separate issues. we have to recognize how we solve the short-term issue will affect how we address the longer-term. my main concern is we do not recognize how difficult the problem is going to be. we have essentially picked all the low hanging fruit of the fiscal system. we have stretched ourselves beyond comprehension. the basic problem is fundamentally the issue of

spending. we have had a significant rise in so-called government social benefits. it is going up at a tremendous rate. the irony of this is it went up even faster during the prudent years of republican administrations, more so than the spendthrift democrats. this is a bipartisan problem. i think we have got to stop it. we have to stop it clearly. the real difficulty is dollar for dollar, it is eroding the savings of society. savings is the fundamental input for capital investment.

capital investment is the primary ingredient for productivity. growth and productivity have slowed down. our growth rate has slowed down. until we solve the short-term problem to get on to the longer- term problem, we will find the markets will respond very negatively. the fundamental concern is we have to realize where we're going cannot continue indefinitely because it is eating into the productivity and growth rate of the economy. if we do not have that, how do we finance our benefit programs? you can write entitlements as long as you want. where are the physical resources going to come from to meet them? i think this is a critical issue. kicking it down the road will not help. the markets may respond negatively before we even notice it.

that will cause a huge problem. >> i think in the case of europe, you can take any of the countries you wish, the action taken happened suddenly it seemed to me and surprisingly. do you have any sense of how much time the markets will give us before they react in a strong way? >> the one thing about markets is they do not give you advance notice. if they could give new advance notice, the problems would be arbitraged away. by definition, a crisis coming from markets does not give you advance notice. we have to recognize that fact and not say we will deal with this when the crisis arises.

that is late in the game. >> what do you say about that? >> i agree. you will not know when it happens. it is impossible to forecast or plan different things. you will have a crisis at some point. how do you deal with that? you cannot cure it overnight. that is for sure. spending is the crux of the problem. there is a lot of that built in. it will take years to get back to get back in relation to gdp to something sustainable. how do you create the program now that is convincing? you are talking about 2013 or 2014. you have a convincing program

that will get to the right place in 2020. it will take that long to get back to a balanced budget. we will not have the crisis or we will minimize the chance of a crisis if people are convinced you are on the path to deal with it. i think that is the political problem that exists at the moment. how do you convince the american public and the world that the united states is on a sustainable path? >> one of the questions i ask when i express the concerns you are expressing is, where else will they put their money? that is the question i get asked by people when i express these concerns.

where else are the lenders willing to put the money but the united states? the united states versus other countries. in no other countries will people put a lot of money in, so whether you worried about? that is true currently, but we cannot count on that forever. china is going to be different in a few years. japan may have some recovery. europe, we hope, gets out of its problems. we cannot say we will deal with this problem later because everyone else is worse off than we are. that is not consistent with the kind of leadership the united states needs in economic and political affairs. we cannot simply accept the argument that other people are worse off than we are.

>> we have had a great blessing of a reserve currency. let's talk about how permanent the arrangement is. it is very convenient. it has enabled us to finance deficits easily at low interest rates. we have to finance the balance of payments. karl marx is not a prominent figure anymore. once in awhile, he said things that were sensible. he said if you give countries enough rope to hang themselves -- look at the southern tier of europe. they could borrow easily until it stopped. borrowing indefinitely easily is a good recipe for a first-class crisis. >> this issue of where they will put their money, there are two fundamental problems. one is the assets can evaporate. wealth is two factors.

it is income wealth and future income. it gives you the value of the assets you really have to invest. there is a simple solution. what will happen is the discount factors will arise. there is a structure of other things people can do. they can take their money and put in goods. as a currency, there is gold. the notion they cannot put it anyplace is nonsense. investors can and will do it in the wrong places for the wrong reasons. whatever they may do, it is not good.

>> paul, do you want to add anything to that? he raised an interesting question. how do we give credibility we're going to do something this time when the problems we are describing are very complex? whether it is reforming the tax system or entitlements or whatever. do you have any ideas? >> if i had the answer, i would tell you. i would not keep a secret. it is a difficult problem when you are talking about something that has to take place over years. you do one of two things. you have a target which is

accepted generally by the president, congress. one way of expressing it is the way simpson-bowles did. what percent of the gdp will account for expenditures -- and use that for the spending programs, entitlements, defense, and civilian? it is hard to put it into law. you cannot predict what will happen several years down the road. do we have a consensus we want to get spending that is running as high as 25% of gdp? can we get it back to 20%? it is tough. is 22% a reasonable goal? that is one way of going about it.

the other way is setting a numerical target for spending and taxation. on the tax side, it is easier. you can change the tax law. you cannot change, i do not think you can have a lot of control of spending for 10 years. >> there is an interesting issue in policy. it is extremely difficult to rescind entitlements to which people think they are legally entitled. as you are doing that, you are abrogating contracts of some form. there are all sorts of constituencies under every entitlement program which support it. the issue is taxes can always go up and down. there are not the same political pressures there. i think the issue is fundamentally spending.

if we have to pay a high price in raising taxes temporarily in order to get spending down, i think that is a good deal. i do not think you can continuously keep this deficit open. if you raise taxes, we will turn the economy down. if the cost of getting out from under the problem is a moderate recession, i would say it is a cheap price. somehow thinking we will get through this thing without pain is nonsense. this is a very dangerous situation. it is not a question of whether we pay a large painful price or a small painful price. the question is which is the least worst of alternatives. if we have to pay a large price in increasing taxes to get the extraordinary unstoppable rise in spending, we have to do that. then recognize it is politically easier to lower taxes than lower

spending. >> let me take back a bit of what i said before. there are some areas you can work on. social security is less a part of the entitlement problem, but is a problem. i think is solvable by means that have been much discussed. when you put that in place, you have something that will last for years. theoretically, you can do something about medicare. i do not understand enough about medicare to give suggestions.

the entitlement program, you can redesign. defense spending, civilian spending depending on year by year appropriations is more difficult. put in place and say there is for 10 years. >> as i have listened to various schools of thought, it seems there are at least three. one is the short-term problem is so primary that we have to get around to stimulating the economy short-term and let the long term take care of itself later. alan, i heard you say getting the long term situation under control is so central that you are willing to take steps that may retard the economy short term. then there is another school of thought that says you can do both in the following way.

you can lay out a plan for the long term that will create confidence you are going to do something, but it does not get put into effect until the economy has recovered. what school of thought do each of the fallen to? maybe there is a fourth? >> i do not think the markets defined solving the short-term problem. we promise to pass legislation. let us now to the short term. they will start to laugh. the form of laughter is the markets are going to run into serious problems. we have got to stop. this is a problem.

we are in a democratic society. in a democratic society, we all have our own ideas. but compromise is not an abrogation of principle. it is a recognition we choose, in order to maintain the fundamental structure of our society, to compromise. we used to do that all the time. the stress between the parties is no greater now than it has ever been. you go back and look at the distribution of the caucuses in the house and senate. they all look precisely like they did with the conservatives and liberals 50 or 100 years ago. the problem is, unlike what we used to do 20 years ago, people used to speak to each other across the aisle and talk to each other and come to an agreement.

it was never a difficult problem. now i do not think they do. until that starts at a level that gives majority votes, i think this will be very tough. >> i take it there are people who say it is so difficult to get people to talk to one another that you have to create a crisis, which is the only thing that will get them talking to each other. in medicine, there is the phrase that disease is caused by the doctor. i do not know what that strategy leads to. but what do you think of that point of view? >> i do not disagree with it.

is that what you are saying? >> you, paul? >> we may create a crisis like the current crisis over the cliff, the political crisis. >> why do we have a debt ceiling? we have an appropriations process that creates the spending level. we have a tax code. if you are even remotely adroit in arithmetic, you can figure out what the president and congress have passed and what the debt of to be. now you come in with a new -- it goes back to the liberty funding act of world war i. originally, the congress had to pass legislation for every issuance of debt. they speeded up the process by putting in a debt ceiling and substituting. we have still got it. i do not get it, frankly.

>> if you were a congressman, you would elect to have the trigger to talk about it every once in awhile. >> why do they not spend time doing something about it? >> to go back to the earlier question, given the state of the economy, it will take some time to get consensus. it will not be january 2013. it is going to be 2014, 2015 before that gets put in place.

it is not easy to change the tax thing where you say to get rid of some deductions and loopholes. they are there because people want them there. we ought to get rid of a lot of them. there is a big debate as to which ones to get rid of and how. to think you will resolve it in two weeks or six weeks is foolish. >> you mentioned taxes. one of the biggest debates going on is what to do about taxes on those above $250,000. one of my roles is to try to present various sides of the debate. there is a school of thought that it is the over $250,000 that are so-called job creators. if you increase taxes on those, you will have a significant effect on the economy.

this is part of a larger question of how serious the effect is on the economy of raising taxes. let's start with a narrow question. suppose taxes were increased for those above $250,000, but not the rest. what would you guess the effects would be? >> zero. >> that is a nice, clear number. >> i do not quite agree. we can decide the issue of the political notions of who should get taxed. there is no question the vast proportion of personal savings which is the bigger part of gross domestic savings in the economy are in the upper income groups. to the extent you increase taxes on them, you are essentially reducing savings.

the data are clear on this. savings are a necessary condition for capital investment and productivity growth. leaving aside the argument as to what extent the issue affects the economy directly through the so-called job creation, i do not look at it as a job creation issue. that is a secondary effect. i look at it as a problem -- there is one remarkable stability in the economy in the last 40 years. it is the sum of government social benefits to persons, and a gross domestic savings on the economy as the other.

if you add them together, they have ranged from 26% to 20% of gdp going back to the mid 1960's, and what you see is dollar for dollar, as the increase in benefits rises, savings go down, and this fundamentally affects the long- term outlook. if you, for example, project the issue of savings continuing as a stable proportion of the gdp, which it had been from, say, 1983 back, and you look at the actual decline that is going on in savings, and you can attribute roughly to the spending rise, and that is the reason we have got to stop this extraordinary uncontrollable rise in spending.

it is affecting our long-term growth, and the irony is, without the long-term growth, as i said before, you will not have the resources to make the benefits that are being created by the congress, which are paper benefits. they do not create anything. they just get a right to get this targeted. >> if i understand your answers, paul would say if has zero effects. i am sure you would want to elaborate. >> i hear you saying why you do not like it.

if it is part of a total package, that gets at the spending problems. you think it is a price worth paying. >> absolutely. >> i do not think changing that particular tax rate at this particular time will have a big effect on the economy. overall, there is a good argument for keeping tax rates as low as possible and lower than the level at which we are in. that takes a lot of consideration of the total tax system and how you organize it. i would aim ultimately for a balanced budget, and you want for a lower level of spending as you can get by with. i do not know exactly what that is, but it is a good deal lower than we have now. that is a fundamental problem, no question about it.

then we have got to revise the tax system that will produce whatever it takes, 20%, 21%, 22% of gdp, and do that in the most efficient way it can be, and i think the present tax system is pretty well broken. i'm not sure we can rely so much on the income tax as we have in the past. we ought to begin looking at more consumption-oriented taxes. >> i agree with this. it is a terribly important point, because remember what taxation is for. it is to find the spending which we appropriate. spending comes first, and then you decide how much you need to raise in taxes. this notion that we can somehow manage the fact that taxes and spending do not go together has been a failure. we have tried it for years, and you have been arguing against the deficit. the reason, as you may recall, the general ethos in the united states before i would say 1970's, or maybe even a little earlier than that, was the fact

that the federal budget ought to be -- ought to have taxes equal to spending. i remember president eisenhower apologizing to the american people for a very small deficit. we got sophisticated with our macro economic models as how you can manipulate the economy by boosting fiscal policy. there is a terrible bias in the way the system works, which has led us to this fiscal cliff, which -- and without the debt ceiling. you have been railing against this, i regret to say, with no interest whatsoever, but we have come down to the point where our very sophisticated economic policies have led us to this point, and i think the way paul put it is exactly right -- you decide what you need to do for spending and then you raise whatever is required to fund the fact. and stop with this business of we can do it, 3% of deficit, because it does not change the

level of debt to gdp. that is factually correct, but it is irrelevant because if you do that, you will make -- you will not make that either, and that is what is happening. >> let me shift a little bit to europe and try to help me understand this situation. first, what lessons does the european experience teach us, and, second, there are a few indications that maybe europe is coming up with some possible answers to their problems.

what happens -- a lot of the money has been flowing out of the euro -- what are the chances that europeans might be getting their act together, and if they did, what effect would that have on us? >> do not think they are getting their act together. kicking the can down the road, what that is fundamentally doing is financing a very large part of the fiscal deficits of the 17 countries of the eurozone with central bank money. you can look at the size of the european central bank balance sheet, and last year it has gone up more than one trillion euros, funding essentially the deficits of the individual countries by lending directly or essentially buying the bonds of the particular countries. there is no evidence that -- the greek situation is classic. i cannot imagine how the level of debt increases ever are to be paid off.

the problem ultimately is that the guarantors in northern europe of some of the extraordinary behavior of the southern europeans is running into problems in the north, and i do not think this is coming- together. as i wrote in an article a year ago, i did an article in the "financial times," saying it is a cultural problem, and i think the euro is going to have great difficulty holding together.

>> paul, do you want to add anything? >> i hope it holds together, but it is a difficult road to follow. the levels of unemployment they have and some of the southern european countries, but i think the big lesson here is you refer to -- you have a situation where there was no restraint on greece and spain and italy and borrowing money cheaply partly because they were part of the eurozone and that failed provide the answers and they could borrow with the same industries as in germany. they borrowed and they got in trouble. they are small countries. the united states is a very big country, but we have some of that symptom, and we do not want to have the breakdown that they had in europe when they reached the limits that the markets would take on their borrowing. the real lesson for us here is a fundamental lesson.

>> i want to wrap this up a little bit. i want the two of you to play god for a moment. >> just play? >> perhaps you are already in that state. we have outlined today's challenges, short term, long term, and so forth. if the president were to call you in the oval office and say, ok, all things considered, what should i do, what would you have him do? >> i would like paul to answer that one first. >> as to what to do with this untenable situation, that sequester, they need to do a short-term deal, do the hard work, and deal with the tax system, and you got to look at social security, medicare, and what can you do that is convincing in terms of the other expenditures over a period of

time. that is a very tough thing, but is there consensus on the broad level of spending that we are willing to pay for in taxes? i am afraid that is more than 20%, which is what the historical relationship has been to gdp, but i do not know if it has to be much above that, but that is the question. >> alan? >> well, everyone is saying the right thing, so to speak. both the white house and congress. they have been saying the right thing for a long time, but nothing has happened. i basically say unless and until we literally decide that we are willing to forgo some of our

privileges on both sides of the aisle, we can talk -- we can posture as much as we would like, but it will not make any difference. you have got to act. the markets -- let me say this -- on september 14 -- i am sorry -- a program shortly after simpson-bowles was announced, i was asked -- barely understood that it had just come out -- whether simpson-bowles would be usable by the congress, and i said that simpson-bowles is what will ultimately pass, and the only question is whether it is before or after a crisis. i still hold to that view. >> ok.

i have raised a lot of questions. what should i have asked that i did not? >> you are always comprehensive. [laughter] >> is that what this conference is all about? >> i would be thrilled if that were the case. all right, please thank these two. [applause] very well done. >> the challenge is clear. be have to focus on accelerating the economy and the job growth. that means avoiding the fiscal cliff. be to talk about the payroll tax component of that which is significant and is not in a part of the conversation. i believe we should look at a one-year extension of either

that or some other mechanism that delivers the same economic benefit kerry >> $95 billion, the price tag for that. the goal here is to bring this deficit down. >> the goal is to make sure we do nothing to harm the fragile economic recovery. that would be the worst thing in the short term. than to lock in a long-term path to credible, stable deficit reduction. we are trying to accomplish two things at once make sure we do not do anything in the short term to place a drag on the economy where we should take measures to boost the fragile economy. >> how much latitude as the president have now in terms of negotiations? he is getting pressure from democrats and republicans but with in the democratic party and congressional leadership, does he have a free hand to talk about difficult things like, for

example, scaling back medicare? >> the president has the confidence of the democratic caucus in the house and senate. that -- that does not mean there is a blank check. everyone will want to make sure they are representing their constituents in the best way. there is a consensus the president has laid the president has pointed out the approach he has taken was not some secret during the campaign. the president was one person who was absolutely transparent about how he would approach these issues and laid out a revenue plan in terms of allowing the top rate for high-income individuals to return to clinton era individuals. he also had a tax reform component that lower the value of deductions, and a pretty

clean way by dropping the valley of deductions to 28%. he has put a plan on the table. we have done really heard a plan from the republican colleagues. we heard a good tone from speaker banner, but not any particular plan. with respect to the other issues, the approach we believe we should take to health care and medicare -- the reality is the per capita increased in cost and the health-care system runs slightly higher than the medicare system. simply transferring costs onto individual was did not address the fundamental problem. building on the fundamental reforms to took on the affordable care act which is to move away from a strict fee-for- service system is the better way to go. >> let me run a couple of ideas

past due that i could not get the gene to bite on entirely. raising the trigger for those earning $1 million a year may to $500,000 a year. what do you think about that? how will that play in the caucus? >> i think people will consider various options. the fundamental issue is to make sure we boost job growth but also make sure we are on a plan to deficit reduction. what is the revenue to cut it makes. if you look at the simpson goals plan =-- simpson bowles plan, the reality is, the revenue is

more the what the president has put on the table even at the $1.60 trillion number. it is important to everyone recognized that. if our goal is deficit reduction as a long-term goal -- what we have to decide upfront is how we will get the revenue and how we will get the cuts. the issue off with going to a $1 million threshold is that means less revenue coming in over the next 10 years to try to hit that target. where will you make of the revenue? he will have to find somewhere else if you are going to take that a balanced approach to long-term deficit reduction. >> 1 1/6 dollars trillion. is that a target that you think is the right target? >> i do. i think that is the right target. i emphasize the fact that the some symbols from mark -- i think they have a good framework in the sense they have the right ratio of cuts to ratio

recognizing their estimate included a denture they're starting. the amount of revenue you would receive -- in they're starting point when back to the revenue you would receive at the clinton era. that is why they get the deficit reduction numbers that they do. if he were to take up the assumption, they are about $1 trillion short on their targets. that is an important piece of their plan. the president's proposal comes a little bit less on revenue. i think $1.60 trillion is a good target. a little bit less than simpson bowles. his plan has the right balance. >> there have been some democrats that said the negotiating position would be enhanced if we went over the

cliff. >> i do not think we want to go over the cliff. we are trying to avoid going over the cliff. the real issue is whether republican colleagues are willing to make the tough decisions before january 1, or whether they will only face those decisions after january 1. the president has laid out a clear plan, and not just since the election but before the election, about how to get there. when i say he has set the right tone, let's see the substance. the president has been transparent. let's see what the speaker is proposing. if it does not hit those targets, then we are not going to be able to accomplish our goal of long-term deficit reduction. it would be really bad if we kicked the can down the road again. between what happens in the next

six weeks and what happens over six months in structured way, we have to lock and assurances that we are going to accomplish those dual goals. job growth and a sustainable credible path to a long-term deficit reduction. >> what role are markets playing in this election right now? obviously, there are some investors out there -- maybe it is not all tied to the fiscal clift -- there are investors that are nervous. >> there are lots of factors that go into the nervousness in the stock market. there are these twin objectives, both weighing on people's minds. people do not want to much deficit reduction right now. it would have a negative impact on the economy. if we go over the fiscal cliff, just from a numbers point of

view -- i am not advocating it -- with a look at the congressional budget office 10 years out, you have your deficit to gdp ratio down below 1%. just mathematically and from long-term deficit reduction, that would be the way to go. but -- it would have a detrimental impact on the economy right now. the trick is to accomplish both of the objectives. one is to prevent the drag on the economy. do things to accelerate the growth. the jobs plan, including an investment a in infrastructure should be part of that. then we have to do this piece. what this chart illustrates is there is an important revenue

component to this. you are talking about $5 trillion in revenue if you do nothing and go over the cliff. the president is on $1.60 trillion -- that looks really reasonable. if you go over the cliff to get $5 trillion over 10 years. the president is saying let's do $1.60 trillion. that is a reasonable proposal. >> you also get a roughly $600 billion in savings from the pentagon -- military spending. what is your own view on whether or not this government should be prepared to go beyond the 400 a $7 billion the president targeted in terms of reduction in defense spending and go further? something closer to the $600 -- $600 billion figure. >> we did $487 billion in

reductions as part of the original budget control act. it is important to know there were reductions up projected increases. it was not a reduction of the baseline. since then bowles had about as much savings if he went over the fiscal cliff. the sequester is an irresponsible way to deal with cuts weathered defense or non- defense because it is across the board. in terms of the magnitude of defense savings i think $5 billion cuts is excess of. i do think there are additional savings to be made a in defense. the chairman has said another $100 billion, others have made good arguments for how you can

do a little bit -- the main issue is what is the military strategy. the reality is we are doing lots of things that enter the military that are still looking toward the cold war strategy. we need to focus on what our strategy is for this century and a line resources that way. >> you played paul ryan during the vice-presidential debate. you perhaps know the budget plan almost as well as paul ryan. what can you say about the plan knowing you were critical of it, you have opposed it. what could the basis between the middle ground? is there anything you see as a

seed for compromise? anything you could negotiate with republicans? >> there is very little overlap between the democrat and republicans. we believe there are savings to be made in terms of rolling back the excess of agricultural subsidies. that is a part of his budget and a part of ours. we should be able to agree on those issues fairly quickly. the term common ground is used a lot. what we need is -- it would be great to find common ground. compromise means you have to accept some things you do not like an exchange for a moving forward and accomplishing a

national objective. compromise has been in short supply until many parts of capitol hill. hopefully this will allow us to move forward. it needs to move forward in the context as change indicated of an understanding that these issues where central to the campaign. there are some issues we are on the sidelines. this was not one of them. in the debates, budget issues, tax issues were all debated. >> the president has a mandate on your view? >> on this set of issues there is no doubt when asking high income individuals to contribute more to deficit reduction so we do not have to whack other parts of the budget as hard as you otherwise would, he has a mandate. you also see the exit polls that

indicate a majority of americans support the idea. you have at least 50% of the voters who believe we should ask hire and come individuals to contribute more. have others that say we should raise revenue generally. again, it is important to understand that the president, of myself, others believe the balanced approach that has been laid out by a bipartisan groups provides the correct framework for approaching the problem. others have entirely rejected the framework. they have said its from work is not the way to go because of the revenue piece of it. >> do you sense something different this time around? you were on the super committee.

i saw your frustration. is there something different now, do you think? >> there are two things that are different. i do not think it is a secret, but a lot of them made this point in their statements, there are a lot of people on the republican side who were focused on trying to defeat the president. it was difficult to get any kind of cooperation. the president has been term limited. hopefully that will not be an objective. i put less stock and that and the structure. while the fiscal clift contains great potential risks, it also is an action forcing event that creates opportunity. it is a very combustible mix of issues. we do not wanted to blow up in our face. it also presents an opportunity. the president has laid out the challenge on the revenue side. i think it is important people

listen carefully to what he says. we do want to avoid going over the fiscal cliff. he has said he will insist that higher income individuals contribute more to reducing the deficit. we wereink about if going into january 1, january 2 and all of the things reset. the president goes on national television and says, you know, i am trying it to provide tax relief to 98% of people. in fact, 100% of the american people will get tax relief on their first $250,000 of income. the republican colleagues are saying, no. nobody gets any tax relief unless higher income individuals get a bonus a break on the and,

above $250,000. that is the position they would be taking. i think that is the wrong policy. i think is so politically unsustainable. i hope our colleagues for recognize that is unsustainable between now and the end of next year and is not put that proposition to the test starting january 1 of next year. >> we have one of your republican colleagues waking adventure of the wings to talk about the same issues. thank you for joining us here. [applause] he is the chief that the from illinois. good to see you. i hope you had a chance to hear what your colleague had to say, at least some of it. also a member of the ways and means committee and served in the illinois state senate with

president obama. let me get to you to respond to what you heard from chris van holland, especially on the issue of taxes. did i think there is ambiguity on the democratic side on the aisle and i think there is something chris did not say and we have not heard from the president. it is, who is rich? there is the 250,000 of description, the $500 .escription and many people across both sides of the aisle represent entities organized as passthroughs. very little discussion beyond the bumper sticker rhetoric on the impact on passthroughs as it relates to higher rates. did you notice really what we

have not heard from the white house? a discussion on the other component that is where are the spending cuts? the discussion about that. there has not been any discussion since the election about where the cuts are. remember, the president described a balanced approach as a 1-3 revenue to cut ratio. we have been having the conversation on the revenue side. i think house republicans are here ready to be a part of the discussion and part of the solution. we are also interested in where is the substance as it relates to cuts. i assume that is coming.

>> will you be disappointed if the president in a few minutes' time does not offer somebody substantive? >> my hope is that he does. my hope is that he recognizes the parameters of his own rhetoric in the past and the frame marquee articulated. when he meets with the speaker and other leaders, that will be part of the discussion. i would be surprised if the conversation is completely dominated. >> will republicans look at the revenue issue and go beyond simply closing deductions, closing loopholes? this idea of some increase as the president said he will only accept. if that does to 36%, something that is almost embolic the

accused the president goal but at the same time would violate what speaker john boehner said. we are talking about gestures. is that not a waste of time? if he believe fundamentally that raising rates is going to have an adverse effect on the economy. on the democratic side he did not get the sense they have the same level of belief as it relates to economic growth. it is somehow driven by party dogma. why not eclipse the same scene? have a president that comes in and says really littering their rates from the past as old days. this could be the transformational moment that

was that is the art of president obama's campaign in 2008. the positive leaning nature of it. the hope of it, if i can coined that phrase. i think there is an opportunity to transcend this whole scene. you have to step back and reflect and say, maybe there is a possibility that the president did not recognize how close he came to a deal with speaker john boehner during the debt ceiling talks on the so-called grand bargain. when this comes close to him again, rather than thinking it would become a better deal if he waited longer, maybe there is a possibility of him seizing that. i have seen this characteristic in president obama in the past. i think there is a possibility he can do it now. >> it was the grand bargain they

were talking about two years ago. if it were put on the table now, with the house republican congress back to john boehner? >> the $800 billion revenue increases through growth and deductions and loopholes -- i an not with this vote. >> you might have too soon. >> i have that figured out. i think the house republicans are poised to clearly move a in that direction. are you asking me if the speaker is hunting out ahead of the pack? i do not think so. i think he is leading the house and the way. but for anyone who suggests he goes into the house without the support of the republicans, that would be wrong? >> that would be wrong.

the speaker went out today after the president was a victory and went to the cameras and offered sincere congratulations to the president and laid out a pathway for us to get out of this. i thought i was a good pathway. there were some parts and language about compromise and common ground. call it whatever you want, but the bottom line is we have to figure out a way to avoid the fiscal cliff and the drama that would ensue if we went over at. we are telling you we can come up with more revenues. take the victory lap on receiving additional revenues. let republicans take a victory lap on keeping rates low. eclipse the whole thing and move on into the tax reform agenda.

let's focus on making the united states tax code the most competitive and enter the world. >> let me ask you about specifics on that. we have already had significant conversation on closing the loopholes. do we need to go through individually and look at the mortgage deduction, look at charitable giving and each one individually? >> a think what you'll end up doing is, this is why you cannot come up with a tax reform package during the lame duck session. that has largely been the duct. where are our members on these things? remember when harry reid was able to sit back and figuratively in a corner when

people were talking and then at the end of the conversation he would speak up. he would say, this is interesting, but let's talk about what can pass the senate. it had a sense of clarifying the conversation and all the fluff for go to the wayside. i think is so important for me to get a sense of where our members are. i think it is that kind of thing you want to have a more robust hearing process, not have something written in the speaker's office and at the ways committee.committee end >> if we allow them to work their magic, there is a sense -- there could be a sense of kicking the can down the road. everybody knows what the tough choices are. they need to be made by some right now. they want to see this done right now. business leaders have said, these guys want to get this

done. >> that is not an unreasonable thing for the market to call out for. the final disposition will not concluded on december 31. much like the markets when they go to their own investors, clearly congress is going to have to do more work in the next fiscal year. if the hope and expectation is if there is a pretty bow on this on december 31, they are pumping sunshine. >> let me ask you about the entitlement side of this. i have heard from republicans that if the democrats go further on medicare on entitlement programs, we might be prepared to go further on the revenue side. what would you take as a sign of movement on the democrats when it comes to entitlement programs?

>> i think there is a shift or a deposition that we are looking for, and that is to be substantive to put something substantive on the table. i did not over characterize how underperforming the white house has been up until this time in terms of description and disclosure of these types of cuts. to the extent that the president is feeling a mandate as it relates to taxes -- that is what the congressman was referring to, house republicans are equally as indicated -- vindicated when it comes to passing the budget, coming back with the second-biggest house majority since world war ii. there is a sense they crossed a political rubicon. that was to take a entitlement program everybody loved that will be insolvent downside of a decade, reso it to the ground, come up with their revenue, go

to the public on it, win reelection. then said, there is something robust there. what we have not said is, it is our way or the highway. we have said here is a way forward that we think is a winning issue from a political point of view. clearly, it did not cost the house republicans a majority by taking that on. you got this sense that, ok, we have done something. let's move forward. in terms of lines and enter the sand or markers, these -- all we are looking for is a raise of an eyebrow or a head fake or anything at all that acknowledges these entitlement programs have to be part of the mix. we cannot continue to say, ok. it is off line and will go away. >> it might have to be a multi

trillion dollar rates of the eyebrow. we do have some questions that were submitted from facebook fans and foundation supporters, specifically for elected officials. you get to be the beneficiary. given how hard it is to cut spending in washington, is it a step in the right direction allowing it to happen? >> know, going over it is a bucket of crazy. it would have such an adverse impact on our military. secretary panetta said it is devastating to the united states military. it was not meant to be policy. it was meant to be a provocation for action. it is a successful provocation for action. everybody is talking about it. my sense is we will get this done. as far as using it as policy, i would argue against it. >> from facebook, there would

like to know, why not adopt simpson bowles? they negotiated a bipartisan plan. at the end of the day, is it not the solution? >> i think there is a brightness to it. i think there is a in a cumulative nature to the talks. some of them have been characterized as failures of in the past. i look at the work as foundational. i look have looked at the conversations between president obama and the speaker as a foundational. clearly the work of the super committee as foundational. was i disappointed? yes, but you build on them. the reason i was not in favor of simpson-bowles or house republicans in favor of it was becomes of the same question as a relates to taxes. we think we have offered an

alternative so the president can get his revenues that he needs. he said, -- take a victory lap. listen, i have these revenues coming in as a result of willingness of the republican congress to work with me. he clips to tax reform. >> the president had a mandate specifically on the issue of tax rates for the wealthy. do not subscribe to that? >> if the president had a mandate, nancy pelosi would be the speaker of the house. >> the same question i put to gene sperling. how confident are you as these first face-to-face negotiations began, there will be a deal that you and your colleagues can support? >> very confident. there is an opportunity the president has to lead the country in a way that he wanted to back in 2008. there is a benefit to limited

government. the president did not have it in 2009 when there was an expectation. listen, this move forward with the agenda. now, there is a restraining influence. i think there is an obscenity for both of these men, the state senate, their dispositions to come up with a remedy to get it done. >> would be better if it was just the two of them? >> are you stringing me out? >> well, they both have temperaments that can get to yes and that is a good thing in leaders. >> thank you for joining us. >> great, thank you. one of the players in these negotiations. thank you for that republican perspective. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]

>> next, members of the house comment on the house hearing of david petraeus on the benghazi attack. then, the chair of the black caucus comments on the comments of susan rice. then, julien sanchez will discuss the privacy of e-mails, especially when a federal investigation is involved. the director of the carbon tax center talks about republican and democratic proposals to tax co2 emissions. a bloomberg news reporter looks at how states and federal government oversee the industry known as compounding pharmacies. >> truman was president for 82 days. he actually presided over the

senate. vice-presidentpric doesn't do that. he never learned anything from fdr or his staff. it was a transition was zero knowledge. that does not happen anymore. he got a phone call from the white house. get to the phone right away. he picked up the phone. and the other end, he said get to the white house as soon as you can. so, he grabbed his hat and he went out and he had a car, of course he had a car. he went to the white house. he was taken upstairs to the second floor, which is the family floor. he was met by eleanor roosevelt and she said, harry, the

president is dead. he said, what can i do for you. she said, what can we do for you, you are in trouble now. >> from his own life through his presidency, -- looks at the life of harry truman. >> david petraeus testified at a closed hearing on the investigation concerning the consulate attack in benghazi. the former four-star general stepped down because of an extramarital affair but he is agreeing to appear voluntarily. following the hearing, we hear reaction from the chairmen peter king and others. this is about 30 minutes.

>> was he more forthcoming? >> we're still not clear how the talking points emerged. he said it went through a long process involving many agencies. the part of justice, the state department. no one knows who came up with the final version of the talking points other than to say that the original talking points for different from those that were finally put out as far as general petraeus's testimony, that was from the start he had told us that this was a terrorist attack, terrorists or involved from the start. i have a very different recollection of that. the recollection given was that the overwhelming amount of evidence was that it rose at of a spontaneous demonstration and

was not a terrorist attack. the following week, there was also a terrorist attack that made headlines again, it was very cordial, if you will. general petraeus is an outstanding patriot. we thank him for his service. >> can you tell us whether or not has a fair or the security issues surrounding his affair came up at all. >> he was asked from the start of that have any impact of his testimony and he said no. >> how or the talking points different? >> the original talking points for much more specific about al qaeda involvement.

>> the to get -- did you get any of the mission as to why they changed? >> he said that things had been taken out. >> was he concerned that things had been changed? >> they did not tell people the significance of that. it is still very vague. >> and did he allay your concerns? are you satisfied with the presentation? >> i told him that i honestly disagree with his recollection of he told us. look >> did it make it hard to get through those salacious details that have dominated the news? did make it hard to get to this? "some it clear that would not be the focus of the questioning.

that was off to the side. >> it was august and giving you a bit of a chip report. he clearly learned on the ground. they clearly believe that it did not arise at a demonstration. it was not spontaneous, and there was clear spontaneous involvement. this is ongoing. obviously, the secretary of state, a secretary of defense, also people at the white house changed the talking points. >> we will have to say. >> did he not the pious --

supply any explanation as to why it took so long? >> he stated all along, he made it clear that there was significant terrorist involvement and that was not my recollection. >> did he seem tired or worn down by the damage that had been plaguing it? >> it is very knowledgeable, very strong, and spoke from the beginning of the hearing. i consider him a friend, which made the questioning tough, to be honest with you. >> you said to consider him a friend. >> sometimes you go back and forth and you realize that that it was going back and forth.

>> [inaudible] >> the talking was drafted or specific about outside affiliations. after they went to the process, it was taken out. >> how long did the test on it last? >> he gave an opening statement of about 20 minutes. an hour and 10 minutes. >> was there at a statement made about the speech? >> no.

>> i guess it is how you define the administration. the department of justice, the state department, and the national security department. >> what did he say about this? >> nothing controversial. >> did you guys watching the films today? >> no. >> did he say why they were taken out? >> he did not know. the process was completed. they said, go with those talking points. i got the impression that there was about seven, 8, nine different agencies. >> the cia said that this was the revised report? >> they said, ok, you should go. >> who did he say he stays

committed the attack? >> i would just leave it at al qaeda affiliate's. >> was this a week after he resigned? >> all of us in the room, i have known him for nine years. i are urged him to run for president. i know him fairly well. anytime you see him a tragedy to a good person, it is tough to see. he said he regretted what happened and that was basically it. >> this was whether he was involved. >> was he involved in the actual

decision making the night of the attack? >> he was definitely fully aware of what was going on. >> the first attack was spontaneous but the second seems to be more organized. >> the spontaneous aspect is minimize right now. it was primarily a attack. >> how did the entire muslim film get to be part of that discussion? >> that is the product they were creating. at the time, they had clear information that this was strong involvement with al qaeda affiliate's and that was not

made part of their presentation at the time. >> the former director at sought two strings of intelligence, one suggesting may be that -- was involved and the other was more robust, that it was the protest resulting from the entire muslim video. >> he said today that he was emphasizing the involvement between algeria that's it, ok. ordid i dido this yesterday

the day before? how are you doing? let's go, showtime. >> what did you learn of the briefing? >> i think it was very positive that general petraeus agreed to come before our committee. it was good for the country, it was good for our intelligence committee and good for general petraeus to bring closure to a lot of issues that are out there that he needed to take care of and we talked about the first briefing that he gave us the whether it was a dispute about what he had said and he reinforced the fact that in the first 24 hours, he felt at that point that this was a protest, as a result of what happened

with the film. he clarified that after more information came in, there was not a protest. he did clarify, which was important and relevant, that he made in a statement to us that there was extremists in the group and that they are al qaeda affiliate's. that was very important because that has been part of the debate. >> congressman king was saying that his recollection is maybe that the director talked about extremist elements and he downplayed it big time. the emphasis was more on -- >> it is all about your perception and the information that you received. when i was there, my recollection is that we felt it was as a result of the protest and that was the beginning. the first thing you hear is maybe what you retain.

he also said in a group there was extremists and some al qaeda affiliate's. the fact is that he clarified and it goes to show that when you get people out very quickly and because of the congress will need to hear about it. as soon as they received additional information, they clarify it. >> in the first 24 hours, did they believed was a terrorist attack? >> yes, because of the people involved in the groups that were affiliate's of bauxite and other extremist groups. >> that was the description, that it was a terrorist attack, was that information communicated and doesn't that contradict the idea of a spontaneous demonstration? >> if you look at the facts and

what we learned yesterday as far as the film is concerned, the first incident was a lot different than the second incident. that is the different. -- the difference. there was no command and control about evaluating how we're going to go. there was also people attacking enshrine to put buildings on fire. the second incident was entirely different. that was well organized, there seem to be command and control. people had experience and attacking from al qaeda and other extremists, they knew how to do it and shoot mortars. there was a key types of situation. that is where the opportunistic issue comes to play. they got really well organized and they were a lot more serious and well controlled.

>> was it an intelligence failure? >> intelligence failure is getting information as it comes. in the initial situation, this is what they understood. we could interview the ground. also, getting a tape. remember, we had to get our americans out of there. that was a very serious situation. the fbi did not come back for three weeks. we had to rely on the beginning. this was a very unorganized government and security group working with us. that was the libyans themselves. >> there were still blind to the spontaneous -- >> susan rice got a lot of the same information that we did.

colin powell went before the detonations. he was getting information on the facts. >> this is five days later. >> they knew right away that there was terrorists involved. >> if you can do it in 24 hours, how about from the talking points susan rice, they're still saying that it is a spontaneous occurrence. >> i have not talked to her. she was using the same information. >> -- >> he was the head of the cia.

the bottom line is that the initial information that we got, that susan rice got, what does it say? it was an event as a result of the film. then they found that it was not the case. i am not sure how much further i can go with susan rice. i know she received a lot of the same information she did. >> was that petraeus briefed in the committee? briefing thewas beefin

committee. >> they have the jurisdiction somewhere or another, whether it is the state department. maybe homeland security. i'm getting ready to go there now. >> you seem satisfied with what general petraeus told the. did he allay your concerns? >> he stated exactly what he said to clarify what he said in the first hearing. yes, he did. he was the head of the cia and he was at that time the head of the cia. we also talked about his trip to libya. our role is to follow the facts. get away from the motion and the media hype and determine what the facts are and question him under oath to make sure that occurred.

>> what about changing the assessment of al qaeda and fess -- al qaeda involvement? >> avastin -- new information came in. the analyst review it. >> the talking point said that they had al qaeda in this before december 16th. al qaeda got stripped down. >> i'm not aware that they were knocked out at that point. i thought was important that we did not give out classified information. >> the questions for general petraeus about the scandal that led to his resignation. >> there was a mention in his comments was that he was very sorry that this occurred at anything that occurred with respect to his personal situation had nothing to do with his way that he handled

benghazi. he clarify this because he is out there too. >> did he say that there was no national security issues in regards to the scandal? >> we did not get into that. was it a condition of coming through the briefing that he not be out doing publicity? was that a condition of him? -- i did not talk to him about the conditions. >> why would you provide security of this nature to a private psittacine? >> to the have security? >> everywhere. -- why would you provide security of this nature to a private citizen? >> did he have security? >> everywhere. >> we did not have a shot parent without the will to see him.

was that on purpose? >> we did not have any conversation about the fact he came out. this is important for closure, for our committee. you with the head of the cia at the time of the because the power to this has become make a political issue. let's get to the facts. you are the only one that can do this. let's bring closure to this situation. i thank him for his service. >> you don't know any special arrangements? >> could you talk about the change that was made in the assessment that peter king said that was taken out. >> i will have to look at that, whether it was taken out. i'm not sure what that issue is. the important thing is what he said. we all know that facts change. when you try to come out very quickly with an assessment to let your boss is now which

should be the administration, congress, and through the media, a lot of information can change. that is what occurred here. we want to get it right. intelligence is an evolving process. there were people who were injured our interviewed later on in germany. the most important thing was the real time information that we got was seen the film on the first attack. >> as a former prosecutor, we could make it a okay. >> i assume is the same group that came in yesterday. >> this is really four people and our committee, the ranking members that have some type of

clarence, the republican and democrats are going to have the same briefing we had yesterday. i don't think it will hold us on this >> will you get to speak with general petraeus again? >> we are leaving afghanistan, we still have some presence to protect our interest and our national security. we will have an intelligence component out there. the petraeus is one of the few people that had the experience and also have the experience. i would hope that there would be an opportunity to have him give his advice in a certain situation as it relates to what i just said. >> he kept saying the situation kept evolving. can you tell me when it was a terrorist attack?

we had a lot of al qaeda and people from other countries coming in. all lot of extremists and radicals and that was of concern to us. that is why the intelligence committee said this is a hot spot, we had to be on high alert. we did not predict the fact that an actual attack was going to occur. >> we have got to go. >> anything else? >> you said that his resignation had nothing to do with benghazi. .> i'm not sure he made the statement. someone asked him, or maybe just volunteered this in the beginning. i'm not sure and basically, his

resignation had nothing to do with the benghazi issues. that is clarified. i don't think that there is any dispute. >> i think it was very informative. regrettably the majority decided not to show the video. we had a lot of questions about why we are not showing the video. i think the frustrating thing about this is there has never been any question from the beginning that this was a terrorist attack. what we have question is, how far plan was it. it appears not even with the best intelligence this was somewhat spontaneous. in libya there are armed extremists. they launched an attack in the same way the people in cairo did, primarily in response to the video. it was both a terrorist attack and spontaneous. why that has to be mutually

exclusive is beyond me. we are still investigating to figure out who the groups are. it appears some of the armed extremists took advantage of the situation. briefly they organized an armed assault. nobody has ever denied that. i think the over politicization of this -- we have some important questions to answer this. what is the nature of the developments in north africa, how strong of a threat to they posed to us in that region? those are the questions we need to answer, not a bit ridiculous debate about exactly what type of terrorist attack this was. >> the talking points were altered, he said.

>>that is completely wrong. there is simply nothing to that. the extremist group we are most focused on in libya -- there are others. they are inspired by the same ideology that motivates al qaeda, whether or not they are directly affiliated. it is not appear so at this time, but we're still gathering information on that. the issue on whether or not this is al qaeda -- there are a fair number of extremist groups that are not affiliated. >> were the talking points changed? >> they were straightforward. they were not changed. >> [indiscernible] >> he read them, i did not see them. there were three basic points. there was a demonstration that grew into a larger violent attack. very early, we are still trying to figure out what is going on.

i forget what point three was. we did not know who did it. to this point today, we still do not know exactly who did it. it does not appear it was preplanned. there was a truck bomb involved that was clearly an al qaeda planned attack. this was a group of armed terrorists and libya who in a matter of hours there together an armed assault. what we are trying to figure out is what kind of terrorist attack it was. it is regrettable this has become so partisan and political when we have serious questions to answer. >> [indiscernible] >> time.

we will get a chance to see it. anyway, we had time. we just did not have enough time to show it. apparently, it takes half an hour. >> i think it was just for the chair and rankings on the key committees and subcommittees on armed services. >> [indiscernible] >> kennedy -- i forget who the others were. >> was morell in there? >> he was not. >> [indiscernible] >> there was somebody from the fbi. i forget his name. thank you very much. >> centers reporters on the

closed-door hearing on the attack in libya. then marcia fudge comments on the criticism of u.s. ambassador susan rice. then the conversation with wisconsin senator ron johnson. tomorrow, marco rubio is the keynote speaker at a political fund raiser for terry bradstaad in iowa. this is his strip 2 i was the 2012 election and he has been mentioned as the potential republican candidate in 2016. live coverage of his remarks at 7:30 eastern on c-span. the miami book fair international is lot this weekend on book tv with two days of books. featured authors include joab

walsh and a look at the book "mortality." join us on line with exclusive author chats on facebook. facebook/com/booktv. former cia director david petraeus also testified before a senate intelligence closed hearing on the investigation concerning the conflict attack and that the bank ousted. committee members spoke to reporters.

>> we still have two additional hearings. the net public hearing. -- then a public hearing. rex did the cia think it was a terrorist attack within 24 hours? >> i will not comment now. we will most likely, on those things in the final report. to i thinkw we have a ways go yet. we are trying to be very careful and cautious, as well we should. [indiscernible] >> the rules of our committee are you can i use something you learn in a classified session. i can give you my assessment. based on questions, my investigation, my listening that

what susan rice did was use talking points put out originally by the cia, signed off by the intelligence community, and as talking points are requested by the house committee. all the intelligence committees -- communities signed off on it. they were on classified talking points and a very early stage. she did what i would have done or anyone else would have done. you would have said what talking points can i use? and you would get an unclassified version.

i just read what i was pointed tell you if the question was asked. to be sure it did not violate our rules. for people that the public office, you are used to answering questions candidly that the restricted to what is on classified is sometimes very difficult >> and did you learn anything from general petraeus today that contradicted anything you learned yesterday, from the cia? >> i did not. >> did a talk about his resignation? [indiscernible] >> i think it is making a very divisive front. we have seen on intelligence before. it also rounded are going into

iraq and a lot of people were killed based on bad intelligence. i did not think that is fair game. i think mistakes get made. to select ambassador cretz because she used an unclassified talking point -- ambassador rice because she used an unclassified talking point. it is almost as if the intent to assassinate her character. >> no, not to my knowledge. the question was was there a discrepancy between what she said and the cia talking points. i only heard directly one part

of one television show where she used just the cia talking points. that is all i heard. >> were the original talking points changed during interagency discussions? >> let me read the original talking points. the currently available information suggests the demonstrations in bangkok they were spontaneously inspired by the protests -- in benghazi were spontaneously inspired by the protests. there are indications that extremists participated in the violent demonstrations. then it went on. this assessment may change as additional a permission is collected and analyzed. it is currently available information continues to be

evaluated. that is clearly what happened. last point. the investigation is ongoing and the united states government is working with libyan authorities to bring justice to those responsible for the deaths of united states citizens. this, as i understand it, was asked for by the house committee. this was given to them and it subsequently became available to anybody who asks for talking points, which the ambassador did. as i understand the process, the cia prepares additional talking points which then go through the various components of the intelligence community. those components either sign off on them, discuss them, and i believe the intelligence community signed off on the talking points.

>> [indiscernible] >> not to my knowledge. >> why was there is such an amount of security today to protect the general? what's the general was igor -- >> the general was eager and willing to give his views on this. we did not want to make it any more difficult for him. you people are not always the easiest. you can blame it on us. we wanted to spare him that. for in the weight that you did, i apologize. -- for any wait that you did, i apologize. there is a lot of suffering going on.

>> the believed there were security lapses benghazi? >> i would like to be in the conclusion at this time. i have a personal assessment that will come out in our official report. i think really want to leave it at that way on everything except for this one thing because i really think ambassador rice has been treated unfairly. >> did petraeus talk about his resignation at all? >> yes, he did do that. >> but you did not -- did you ask any questions about the situation? >> no.

nobody did. again, i am sorry. i have no evidence one way or the other. >> thank you. >> what is it you all want to know about?

>> let me just say that we had a very excellent hearing with general patraeus as always. he continues to be very direct, very forthright. as the only individual in a leadership position who has been back on the ground in libya since the incident occurred on september 11, it was very important to get him in. he did have a different perspective on things. he clarified some of the issues that were a little cloudy. it was a very good hearing with him. i am pleased the could be there today to talk about it. >> what exactly did he talk about? >> i cannot go into the classified issues that we talked about, obviously. there were any number of issues in this scenario because of the fact we are not on the ground, we do not have people back in the benghazi today even, there are still a lot of unanswered questions. he had to clarify some of our outstanding. >> did you hear anything from general patraeus that contradicted what you heard yesterday from the cia? >> no. >> what were the biggest unanswered questions right now? >> we still have to determine, how did this group penetrate the facility that we had in benghazi and who were these people?

we have a good idea now. are getting closer to determining that. we know there were al qaeda affiliates or al qaeda itself. and we know there has been training going on on the ground. it is delving into more depth on issues like that. >> did general patraeus say he knew it was terrorists from the beginning? >> there was no question in the mind of anybody this was an act of terrorism from the get go. he did not have protesters coming to a protest or to demonstrate with ak-47s and other weapons, including mortars. there has never been any question about that. i did a press release on september 12 saying this was an attack of terrorists.

>> why was it classified then? >> it was not that i knew of. >> why did susan rice go on the sunday shows and not say it was that? >> you will have to ask her that. >> why did the talking points -- >> there were some changes made to the talking points. there are still issues about the talking points that have yet to be resolved. the problem with what susan rice said was not if she had talked to the talking points they were correct, they were. she went beyond that. she even mentioned under the leadership of barack obama we have decimated al qaeda. she knew at that point in time al qaeda was likely responsible in part or in whole for the death of ambassador stevens.

>> we have received information the iraq government -- family of those who were killed by the terrorists should also be outraged. appropriate action should be taken with regard to our relations with the iraqi government. patraeus's meeting was comprehensive. it added to our ability to make judgments about what is a failure of intelligence. his interactions with other agencies -- i appreciate his service. >> [indiscernible] >> i cannot say because of

security implications. i am very restrictive and what i can say. i consider the chairman and the ranking member -- because of the rules of the committee. the evidence very clear that ambassador rice used the talking points that the intelligence committee had also signed off on. she used the unclassified talking points that were signed off on by the entire intelligence community. criticisms of her are completely unwarranted. that is very clear. >> are you able to say whether the cia called it a terrorist attack within the first 24 hours, and it did it include al qaeda?

>> i do not think i should respond to that because of the questions as classification. what is very clear is that ambassador rice use the unclassified talking points that the entire intelligence community had signed off on. and so she did the appropriate thing to it. there are other things classified. that is a totally different subject. i cannot talk about that now. >> did he contradict anything you heard yesterday? >> general patraeus as director of the cia has been completely consistent. so much of this confusion arises because of the difference

between what is classified and what is unclassified. you hear people saying different things in different times. what is classified cannot be discussed publicly. it cannot be discussed publicly because it would reveal the sources of gathering intelligence. it is very important to understand that when people are talking in classified setting, they can say much more a then then they can say in an unclassified setting. the notes that ambassador rise were speaking from was in an unclassified setting.

we should know what is available in the classified way may be different than what is available in an unclassified way. she did the responsible thing answering questions based on what was on classified. it is critically important to understand. i do not want to go further. i thought it was important for you to know the difference between classified and unclassified. that is why you hear things that seem at variants that may not be at variance at all. >> do you believe senator mccain and other republicans have the same understanding? >> i hope everybody would have the understanding now.

>> [indiscernible] >> the chairman and vice- chairman will be coming and making a statement. i think is so important that the character of the un ambassador be clarified. it is our understanding from hearing two days of testimony that in fact what the un ambassador stated was the talking points that had been given approved declassified to the house intelligence committee. that is what i am told she restated.

this member is absolutely convinced we are in -- an accurate reflection of the intelligence community. that could be said at that time in a declassified manner. >> is the issue here that there were talking points that were classified -- >> there are many issues but i when the chairman and vice- chairman to speak as to the un ambassador. i will give a speech on the floor of the senate is still in session. >> we have gained important insights as to what has happened. i still believe there are questions that need to be answered. i think anybody with confusion

in the basis of the two hearings, it is a premature conclusion. i am glad we have two more sessions ahead of us. more people we need to talk to. it was helpful to have patraeus speak to us today. we are learning a lot. in my opinion we have not come to a point we can draw conclusions as to what happened. >> what could he not answer today? >> there are still issues out there -- some of it is related to classified information. we have a commitment from the chairman and a consensus that we will continue to pursue the finances to some very critical questions that will give us insights as to whether it is engaged influence related to this. americans deserve to get the whole story.

>> how was the director? >> he was forthright and received gratitude from us for his service to the country. we all regretted the incident that led to his resignation. we are grateful for his service. >> did he believe it was a terrorist from the beginning? >> greater than i am not going to go into affirmation that is really classified information. i will leave my statement that that. >> did he addressed the affair? >> no, the issue today was benghazi. we had a general patraeus talk about everything he knew from his engagement. >> [indiscernible] >> i am just going to leave it at that.

>> marcia fudge says sexes and and racism has played a role in the remarks ambassador rice made. as aas been cited possible candidate to replace president -- replace hillary clinton. this is about 20 minutes. >> i want to thank members of the press for joining us today. if you of our female colleagues

to talk about - a few of our female collie to talk about the disrespectful attack on susan rice. e do hav e a member here in a committee meeting, delegate eleanor holmes norton and she must return to the hearing. i will yield the mike to her before i introduce this topic more thoroughly and the script is assembled here today. >> i appreciate the typical generosity of the chair of our democratic caucus. ipc particularly that you have brought us all together -- i appreciate particularly that you have brought us all together. we are speaking for many women members of congress and we're speaking for many members of congress regarding achievement

of ambassador. happen to know her well because she is an ex -- a constituent. some members of the senate seem to be unable to contain themselves while we await to ongoing investigations into the tragic attacks in libya which took the lives of four americans, including the ambassador to libya. instead, they have rushed forward to try to shoot the messenger, pre-judge to investigation and block consideration of ambassador susan rice to be considered for secretary state. they are following the oversight and government reform committee on which i sit which call it rare hearing in the middle of our recess and the presidential campaign.

where province scoffed at the irrefutable evidence that ambassador rice relied on intelligence from the officer of the national director of intelligence. at the hearing, i introduced the statement on the intelligence from the office of the national director of intelligence which said, "in the immediate aftermath, there was information that led us to assess that the attack began spontaneously following protests earlier that day at our embassy at cairo. we provided, the intelligent director -- who use that it

permission to discuss the attack publicly and to provide updates as they became available. throughout our investigation, and we continue to emphasize that the information gathered was preliminary and evolving. i then ask ambassador patrick kennedy of the state department testified at the hearing whether he had any reason to doubt that ambassador rice have relied on ibn to -- relied on information from the national intelligence director. he replied, "no." "when i came up to give a briefing earlier this week following a day care to later by ambassador rice.

both of us were relying on the same information. if i or any other senior administration official, career or my career, would have been on the television show other than susan rice, we would have said the same thing because we were drawing on the intelligence information that was then available to us. this has been an evolving situation. what we knew that first week in the first week and has evolved over time. we know much more now. that should be the end of case. we have no report from the ongoing investigations. two of them are outstanding.

have the accusatory senators. should ask, have the bother to look at the existing record? what motivates their pre-emptive judgment of a brilliant woman who is been a career diplomat, assistant secretary for african affairs -- in both these positions, she is an independent and undeterred by ideologies. she believes the that the best interests of the united states. recently, she invited the president. susan rice has more than art every office and honor she has received. -- has earned every office and honor she has received.

she's a graduate from stanford university, a rhodes scholar, prize winning from oxford and is a brilliant, tough-minded diplomat. we do not intend to stand by while ambassadors susan rice is made the scapegoat of the tragedy because she relates the only official intelligence that was available to the head of the station after time. the rush to judgment against the ambassador is particularly unprofessional and reckless, considering that the intelligence. we will not allow a brilliant public service record to be moderate, -- to be muggeed to cut off her consideration of

becoming secretary of state. >> we have been honored to hear from a senior member of our caucus, the distinguished eleanor holmes norton. i am the co-chair of the democratic women's study group. i would be remiss not to note some of the distinguished people who are here. the presence san diego, california. -- represents san diego, california. of course barbara lee who has become renowned in her

outspokenness about the wars of the death afghanistan and iraq. really did lead the charge towards ending the war in iraq. i think we have heard a great deal from eleanor holmes norton so i will give you the short version of all the things she said. for these men to attack the permanent representative to the united nations, susan rice. we understand all of us have been disappointed in one way or

another about the results of the election. but to batter this woman because they do not feel they have had the ability to better president obama -- to batter president obama is something we will not stand by and watch. they are reckless speculation. unworthy of their offices as senators. there was a time i regarded mr. mccain added gentleman. i'm sad this is not one of those moments. here we see this great center rushing off to a press event rather than going to a briefing on the facts in his zeal to

vent and rant as a result of the elections. the comments that she is not so bright, not just for the, these comments beg the question when you look at her resonate, most of which you heard from our distinguished delegate eleanor holmes morton. we are asking for them to walk back those comments and joining me here -- i will stop my two- page comments at this point. i will call upon my good friend, the just-elected chair of the

congressional black caucus, representative marsha fudge from the 11th district of ohio. >> thank you very much. i will be brief as well. when you lose, you get angry. when you lose you are disappointed. do not take it out of someone who did not have anything to do. blame yourself. how do you say that a person with susan rice's background is not qualified? i wonder what your qualifications are for your job. where did you finish in your class? i know one of them to finish at the bottom of their class. susan rice was a rhodes scholar. how do you say she is not qualified? you may not like her. she is the most qualified person i am sure any of you know that these centers know. how do you say that a person who has served his country with the distinction she has is not qualified? i am confused. none of it makes sense. susan rice's comment did not send us to iraq and afghanistan. someone else's did.

you are not angry with them. it is a shame that anytime goes wrong they pick on women and minorities. i have a real issue with that. i am not the most educated person in this house. >> but i'm close. and i would say to you that these people really don't understand what it is we do here. we are here to represent the people of the united states, to move this country forward, not to tear down. we are not here to make life difficult for people who work hard to do the job that this country has entrusted them to do. so for you who are haters as young people. your hate is going nowhere. but look in the mirror and hate

yourself, not the people who are doing this work. thank you. >> it is the job of these senators to question policy but attacks are -- that's what you do instead of dealing with the policy issues. we have a very distinguished member with us, a good friend of all of us, someone who deals seriously with policy issues and is joined us today and that would be january from illinois. >> also i think today of most significance i believe is my role on the intelligence committee. all of us were given a briefing based on emerging information from the intelligence committee.

susan rice, i do -- susan rice went on television based on the information that was available at the time and the briefing that she was given information and intelligence that she had no part in collecting. the kind of statement that is anyone who had been given those briefings would have made in public. obviously, this was on an unclassified buys sis but she was given information that she had that has subsequently been updated. it was not wrong or deliberately misleading in any way. there had been the belief that there had been a protest that developed into this attack.

so susan rice as the president very clearly said, if anyone has a problem with the intelligence, they should take it up with the intelligence community and the president himself. he said come to me. and so to besmerge her incredible career and her stature and the words that came out of her mouth is completely inappropriate. and by the way inconsequential al. that is i've asked the question would anything had been different if the intelligence had been completely accurate at the beginning? would there have been different actions taken in what turned out to be a tragic situation with the loss of the ambassador and other americans and the answer is absolutely no.

so i'm a bit confused about the whole deal about this benghazi situation other than we all agree it was a tragedy that we had the loss of life. but it's interesting to me that we aren't discussing another rice who went before all of the sunday talk shows some years ago whose statements about false intelligence were based on more information than that held by susan rice about this situation. and talking about if we don't go into iraq now, then the next we'll here from saddam hussein is in the form of a mushroom cloud that really did move to us consequential actions, 44'6" u.s. soldiers killed in iraq not to mention the other loss of life that occurred there. that really made a difference. and i would say that if you live in a glass house, don't throw stones.

and there is no worthy reason to throw any stone at susan rice. >> very profound if you live in a glass house cast no stones. we've been joined by laura richardson from california. thank you for joining us here. this very unqualified woman of course spear headed efforts to bring the international sanctions against i ran, sanctions on -- iran, sanctions on north korea and has brought significant to bringing down kadaffi. we now are going to hear from a very special colleague, terri sewell from the seventh district of alabama.

she has very special insight into the qualifications and integrity of susan rice. thank you for joining us. >> good morning. today i stand with my colleagues, proudly stand with my colleagues in expressing our outrage about the unfair attacks against the u.s. ambassador susan rice. these recent attacks are nothing short of offensive. nothing short of offensive. leading the charge to oppose ambassador rice are our senators who profess to want to block any potential nomination of this overly qualified public serve ant.

and i for you cannot sit back like all of us and not say this is wrong. it's not only wrong, it's actually unpatriotic. to be clear, the attack on the american embassy in benghazi in which four lives were lost deserves to be investigated and the full weight of the american government should be used to finding and bringing the real cull patriots to justice. but to suggest that ambassador rice would knowingly and purposefully mislead the american people is not true. this should not be for political and personal gain. i am outraged that these republicans could even suggest that this administration and

that this chief diplomat would be come police to us in this tragedy. it's offensive and unpatriotic. he acted in good faith in reporting what she had been told by intelligence. she said quote based on the best judgment at the time. senator mccain's comments that ambassador rice is unqualified and not very bright is woefully untrue.

she has the character if our president chooses, we cannot have asked them would not ask for a better secretary of state then susan rice. nunnelee issued a brilliant scholar, the first african- american valedictorian of the national cathedral school in washington, do you see -- d.c., a truamn scholar, a rhodes scholar. she has an exemplary career. she is the only wonderful public servant, she is a woman of character and the person i'm clout -- proud to call my friends and un ambassador. i would be even more proud to call her my secretary of state. let us be clear, it is unfair

and of patriotic to assume the chief diplomat would purposefully misled the american public. to be consist in this tragedy at all is offensive. we need to get back to finding the real culprits who took the lives of the four americans. we need the full weight of the american government to find those culprits. get back to the work of the american people. >> is a great deal of passion on this issue. to close us out, a good friend and colleague of ours from california who herself has had years of distinguished leadership in the california

assembly as the speaker. madam speaker. understands the disabilities of what they are. it is difficult to recruit qualified women, as senator mccain should know that. women find qualified women, we should not preemptively-- when we find qualified women, we should up preemptively destroy the chances of women to serve. i am introducing a woman who has distinguished herself. she is a member from california and served on the foreign affairs committee. karen bass. >> good morning. i am very proud to be here.

today i feel great pride at being a member of congress and standing up here with these distinguished women, all of whom have so many accomplishments. we have heard so much today about the career and history of susan rice. i think we all know what the real deal is. we knew what the story was about before the election, trying to undermine the election of president barack obama. after the election, but the real deal is that our republican colleagues are disoriented and are in a tailspin since the election. they want to shoot, they do not know who to shoot, they do not know who or where turkish should be. right now is on the back of susan rice/ you have heard from my colleagues today, specifically why there is no basis and illegitimacy to the notion that ambassador rice would deliberately mislead the

american public. you have to ask yourself, what could she possibly gain from doing this? but the republicans are accusing her of this completely insistence be inconsistent with her 20 years. my republican colleagues are trying to bully narrative to start a drumbeat about the ambassador in an attempt to derail a potential appointment to the state department, an appointment that has not even been proposed yet. over the last two years, we know the number one goal of the republicans was to prevent the president from being reelected. they failed. the message from the voters was for us to work together. we should be dealing with the fiscal issues facing our nation. we should be getting to the bottom of what happened in benghazi and what we need to do to protect the over 300 diplomats serving our nation and around the world.

congress these to make sure the state department has the resources to protect our diplomats. by some republican colleagues what to cut hundreds of millions of dollars from the state department budget, money that could the been used to protect diplomats. our first order of business should be to prevent a fiscal crisis. in what occurs now, it will be of our own making because of our inaction. fiscal crisis could take place. in january, president obama will be sworn in again. my republican colleagues over the holidays me to do some soul- searching and ask themselves, they plan to spend the next four years chasing ghosts, the ghosts of watergate, in an attempt to derail this presidency? they should stop trying to snare an incredible academic professional record. i am waiting for donald trump to

ask for her trans skips. -- transcripts. we have to stop disrespecting her with the false accusation that she does lipreading that she deliberately misled the public. thank you very much. >> that is our message. we will take any questions. again, we want them to take that back. take back those words piece marching her incredible accomplishments -- besmurching her incredible accomplish ments. thank you. yes, ma'am. >> you said that any time anything goes wrong, they pick

on a woman and a minority. can you elaborate on that? do you feel there is a degree of sexism and racism in their comments? >> there is no question about it. all of the things they have disliked about things that have gone on in this administration, they have never called a male and qualified, not right, a trustworthy. i do not recall it ever happening. they did not even sit at about general petraeus -- sayt that about general petraeus. so there is a clear sexism and racism that goes with the common set of being made by senator mccain and others. i strongly stand by that statement. >> even though she is not at fault for the impression she was given, do you think it makes her

too [indiscernible] >> i think they're trying to preempt that discussion. if you look and her record, her accomplishments for contributions to this nation, and anybody who looks at that record and has a fair conversation with her would come up with different conclusions. >> with all the statement as senator mccain has made about this administration and susan rice, do you think he's not qualified to be senator? >> yes, sir? >> if president obama -- what do

yout hink congress should do about it? >> that is a speculation. we are all try to find out what the facts are. senator mccain does not know. i think what we are dealing with at this moment is a signal the cannot cooperate with the second administration of barack obama. .hey are going to stall out this is their warning shot. here is the intelligence

committee member. >> i am really confused. the appoints in contention is whether or not this attack emerged from a spontaneous protest.

what he hoodwinked the american people into believing that that's going to soft the debt issue. it doesn't even close the deficit by 8%. where the spending cuts? he talks about one dollar for three, one dollar for two and a half. i have yet to see a proposal out of this administration, or democrats in the senate who haven't passed a budget in three and a half years. so listen, i think republicans are willing to compromise for democrats. but but need to see their plan. i've never seen their plan. the only thing we've seen out of this president, out of democrats, is let's increase taxes, punish success. the most that will generate revenue $80 billion a year, talking about $1,090 billion deficit. where are the spending cut proposals? i haven't seen them. host: we're taking your calls in this segment with ron johnson, senator from wisconsin, a member of the appropriationses and budget committees. the numbers are there on the screen for you to go ahead and start calling in. senator johnson, president obama

said the two sides agree right now that the bush era tax cuts should be extended for middle class americans and that he would sign a bill to do that right away if congress sent it to him. do you think that's something that could happen separate from these discussions about taxing on the wealthiest americans? guest: here's the problem. supposedly our only bargaining chip is -- once we do that, what leverage do we have to actually work with the president to lower spending? that's been the sucker punch that republicans have been walking into for decades, where you always get the tax increases, you never get the spending reduction. so certainly before i'm going to look at any kind of tax proposal, i wapt to see the other side of the equation. i mean where are the spending reduckses, where's the structural reform. this president admits need to be

solved, need to be saved. but in the four budgets he's put forward, he has yet to propose any solution. let's face it his last two budgets have been voted on twice now in congress, twice in the senate, once in the house. final vote tally is 0-610. i would submit the compromise first needs to occur on the democrats side, where the democrats in the senate put forward a budget. the president put forward a plan that at least some democrats support as well. once they show a plan to republicans, then we have something to work with. host: again, we're taking your calls in the segment. up first, paul from indiana on the republican line. paul, you're on with senator johnson. caller: senator johnson. i appreciate your stance and what you guys are doing. i'm encouraging you to not buckle. because i'm telling you, according to a "wall street journal" article i've read, the

governor has taken trillion dollars in revenue, that's actually up under the bush tax cut. so the one he wants to end are bringing in more revenues. as far governors toughening their stance on this issue, we would like to -- we just re-elected mike pence as our governor. i don't know how he'll handle this exchange business coming up with the health care thing. i'm encouraging, please don't buckle. it's not the republican's d.n.a. to raise taxes on anybody. work for the empowering, for the individual, not the governmentened and tomko burn, he came out with $68 million waistful spending by the defense department. i think you cut out wasteless spending you won't need to raise taxes on anybody. guest: let's just look at the revenue over the last three years. we won't from a very low point in 2009 and we've increased

revenue on an annual basis. there's been no tax rate increases. that's because the economy has grown at a very meager level. we increased by $344 billion. if we go from that 15.7% of revenue back up to that 50-year average of 18.1%, $373 billion per year just by growing the economy at a normal level. just an average economy. where again all this president's looking at is punishing success to bring in maybe 34, to at most $80 billion a year. what's going to work? the problem is that john is by increasing those marginal tax rates on small businesses. you're going to risk the economic growth that has increased rev nigh by closer to $400 million a year. that's why i'm not far increases in marginal tax rates. it will harm economic growth. and the number one component of any solution, whether it's our

deficit problem, whether getting people back to work, helping middle class and middle income individuals build a good life themselves and their family. punishing success, increasing marginal tax rates aren't objectives of growth. host: betty, good morning to you, your on with senator johnson. caller: good morning c-span. senator johnson, your talking points, and i appreciate that, because that's what you have to do. now, president obama set forth jobs bill, didn't pass it. you blocked everything he wanted to do. and with this don't raise taxes, now if people don't buy, what's going to happen? guest: good morning betty, and thanks for that question. first of all the president with president obama's jobs plan was

the same problem with the stimulus. we borrowed $800 billion from our children and grandchildren. we have incurred $5.1 trillion in additional deficits. of course we've ballooned our debt by close to $600 billion. . from 1970 to the year 1999, the average interest rate that the federal government paid on its debt was 5.3%. because we have tried to accommodate this spending, the federal reserve has been keeping interest rates at 1.5%. if we revert to that average interest rate which is what is happening in spain, italy, and greece, if we just reverted to that 5.3%, the differential on $16 trillion worth of debt, $600

billion to our annual interest expense. it is more than we spent on medicare. it is almost what we spend on social security. that is a debt crisis and a political crisis. the problem with the jobs plan, it is deficit spending. host: a question from a maverick on twitter -- guest: first of all, i think we need to defense the audit the defense department. exxon and mobil and wal-mart, $450 billion. we need to know where the money is being spent. tom coburn has been a great job finding waste and abuse throughout the federal government.

we are asking the defense department to do all kinds of things. you can find areas to save money. i don't particularly like defense sequestration because that is taking an ax to the defense budget. i think you need to take a skeletal. its debt with auditing the defense department's. then really taking a look at what of the security threats and trying to tailor our military to meet those threats. host: this discussion is going to be under way today at about 10:15 when the presidenwhere thd the vice president are going to be in attendance with congressional leaders to talk about the economy and deficit- reduction. you have been described as a champion of the tea party. what is the role of the tea

party in these negotiations? guest: i sprang on the tea party. i am certainly no leader. i gave speeches because i identify with their mission which is limited constitutional government, and emphasis on individual liberty and freedom, and recognizing the federal government does not need more money. it needs to reduce itself, limit itself, stop spending so much money and borrowing so much money. from my standpoint, by any manufacturer. what is the cause of the problem? we produced material for medical devices. i am pretty familiar with the medical provider industry and how that affects health care. the fact of the matter is the

root cause of our problem is the size and scope, all the rules and regulations, the government intrusion. that is what we need to attack. host: is the voice of the tea party being heard in the senate leadership? you came close to getting the number 5 spot but you did not challenge the senator this year. guest: take a look at our new members. i think the core group in the senate has moved more to the right. host: ken is next from florida on the independent line. caller: thank you. good morning, gentlemen. if i may, i have heard your mantra on tv punishing success. a recent report by a

nonpartisan bureaucracy indicated that for the last 30 or 40 years, thsi mantra that if we only give more tax breaks to the very wealthy, they will create jobs. that report indicated that is fallacious and not the case. mitch mcconnell and your republican colleagues in the senate had that report quashed. also if i may, during the bush administration, trillions of dollars were borrowed from china for wars that were off the budget that were never indicated that we were having deficit spending. we were borrowing from china. host: i will give you a chance to respond to that.

guest: it is not rocket science in terms of what you need to do to grow an economy. we do not have the option of choosing whether we have to compete. you have to benchmark what your tax environment, your regulatory environment, your energy costs. the good news is in terms of getting manufacturing, we're still the world's largest market. when global investors take a look at the u.s., and canada's rate is 15% and hours is 35%, where are you going to site your plant? $1.75 trillion a year, a number that is larger than all but 80 economies in the world.

it is not particularly attractive. when this administration refuses to utilize our domestic energy resources, refuses the keystone pipeline which would bring jobs and energy down to america, they reject that. that is not attractive in terms of global investment and job creation. the caller also talked about what caused the deficit then been a lot of charts and graphs dispel some myths. over four years, the total deficit was 5000 $92 billion. the taxes on the wealthy over that same time was $136 billion. all other americans was $544 billion. total cost of the bush tax cuts

and the wars was about $1.30 trillion which means 75% of the deficit was caused by other spending. the wars and the tax cuts certainly contributed, but 75% was caused by other spending. the wars are ramping down and we are going to be taking a look at what we can do with revenue. it is far more efficient to grow the economy. you get hundreds of billions of dollars in additional revenue versus trying to increase tax rates on small businesses. host: what is your biggest accomplishment since entering the senate? guest: i like to think delving into the details of the federal budget, breaking it out into a more simplistic explanation. i travel around wisconsin and in

doing these presentations or adjust lay out the facts. people come up to me afterwards thanking me for giving them the information they did not understand them bett. we are in a trajectory in this country if we do not start reforming medicare and social security. the federal government will be consuming 35% of our economy by the year 2035. those are the economic models that do not work. host: let's go to massachusetts on the republican line. caller: good morning. i would like to think myself as a conservative republican. i am willing to go for part of

the $2,000 increase if necessary to balance the budget. i cannot believe the candidates would take that 10 to 1 category. we have to balance the budget. since we are only at the 18% tax category, normally it can go up to 20%. you have to cut spending and lower the corporate tax. thank you. host: we will show you some stats about the average tax increases if the fiscal cliff were reached, this provided by the tax policy center. guest: we need time to do pro- gross tax rate reform so we can get revenue the old fashioned way and grow our economy. if we see $10 in spending cuts

in reforming and saving social security and medicare, if we see that on the table i think most republicans here in washington would leap at that deal. host: you would be part of that? guest: we have to see spending cuts and the have to be structural and certain. part of the problem is people say we are going to cut spending. i will gladly pay you tuesday. we will take the revenue increases down and then do the spending cuts in the future. we need to understand we do structural reform said the savings are locked in. george fromgo to louisville, colorado, on the democratic line. thank you for calling. caller: good morning.

i was wondering a couple of things. the other day i did a little bit of math. mitt romney makes $20 million a year without having a day job. if that was the average working person in america who whould work 50 weeks a year in a 40- hour week, that would be 2000 hours. i did a little bit of division and figured out mitt romney makes about $10,000 an hour. i think he could probably afford to pay a little more. secondly, i am glad you are a tea party nominee. i can bet you have lost two elections. now, keep it up. guest: what you need to do is you need to incentivize people

to put their capital at risk. it is very easy to say they can afford to pay it. i want to go back to the basic fact that if you are running a business and out of $100 of income, if i am able to keep $60 of that versus $50, i will be able to reinvest that. very few business are taking money out. they are reinvesting in it and increase in wages and paying for health care. when you reduce at the margins the ability to reinvest, you are going to harm economic growth. it is a sad part in our history where we have come to the point where we are not celebrating success. we are appealing to the base and v of individuals. i know people -- we do not seem to beat up on sports stars and

rock stars and movie stars. it is what the marketplace fairs. people are successful and people pay taxes. one of the reasons people pay a lower marginal tax rate is because they invest in tax-free municipal bonds. your local property tax is going to go up if your community is not going to borrow at a lower interest rate because of their tax the vantage. all of these things are connected. there are reasons that we create lower tax rates because we want to incentivize people to invest capital, put their money at risk for businesses to grow and create jobs. if we just caved in to the taxing the rich, it just does not work.

host: when you ran in 2010, you said one of your top priorities was repealing the health care law. is that a realistic possibility? guest: unfortunately not and that is a real problem. we are simply not going to be able to pay for it. when we first pass the health care law, they only accounted for years of full spending and to use of partial spending. it is basically a marketing ploy. i think the american people are rejecting this one anyway. when the law fully kicks in, the 10-year spending will be $2.40 trillion, paid for by what? it is going to be about $1.50 trillion in taxes and penalties.

those are taxes on health plans, providers, hospitals. they are hidden and indirect. those are taxes on middle income americans. where is the other trillion going to come from? reductions in medicare. the $2.40 trillion is a gross underestimation because in that projection -- i have just moved in three years ford. adding three years on to their projections. they estimate only 1 million people would lose their employer-sponsored care. the fact of the matter is tens of millions of people will. obamacare will cost three, four, or $5 trillion over a 10-year

period. you want a summary on what is wrong with obamacare? it dramatically increases the demand for health care. 30 million more americans accessing medicare and medicaid while at the same time reducing the supply by taking $716 billion under medicare, not having providers take on new patient. host: we will talk about the near term with the health care law. scott walker has not said what he is going to do. what do you think he should do? guest: more and more republican governors are taking a look at the facts that if they set up a stake in exchange, the federal government is going to set it up

anyway. it should be run by the state's. he is recognizing the fact that the federal government is going to provide all the rules. he will not have the funding. i am hoping he does not set up a state exchange. by the way, the way the health care law was written, subsidies should not be paid through -- there is no provision to allow subsidies and credits to be paid through exchanges. the irs has ruled contrary to that. host: cleveland, ohio, on the independent line. caller: good morning, gentlemen. i just want to make a quick point. led the american people understand the decisions you made. this is a situation here that i see as making a decision to sign

a pledge for not raising taxes. as a lawmaker, there are many quick decisions you have to make and you never know what is going to happen. you made a point with your chart as far as how the war increased the deficit. as a lawmaker, you never know at any time what decisions you have to come and make and try to help this country. why would the very first thing you do would be to sign a pledge to not raise taxes? from a person who is not even a politician? can you explain that to the american people? guest: as i was running, i signed the pledge. i am not opposed to increasing taxes because i signed the

pledge. i think it harms economic growth. i made that pledge and i ran on it. then i was elected a. would citizens of wisconsin rather have me break my promise? we have hundreds of lawmakers here that signed the same pledge promising the people who voted for them that they will not increase people's taxes because we believe the federal government gets a large enough share of the economy. we are going to work to limit government's influence on our lives paying we did it in the light of day. voters knew we would send that pledge and then they voted for us and sent us to office. i am trying to lay out the facts that increasing taxes does not even begin to solve the problem. the most that the president

obama's proposal would raise in nearly is $80 billion. we are facing over $1,000 billion a year deficit. i think it is really up to this president and democrats in the senate to start showing the american people how they are going to solve problems because increasing taxes, punishing success, does not even begin to solve the problem. it put at risk the economic growth. host: try to get in a couple more calls. from kentucky on the republican line, go ahead. caller: it is good to speak with you this morning. i have had the good fortune to be able to travel across this country. been in practically every major

city except seattle and boston. i come from a very poor, humble background and in a poor section of a poor state. i have become very successful. my grandparents and my dad, they were staunch democrat. but their philosophy was it you do not work, you do not eat. their philosophy was they detested handouts. they were proud people. this is no longer the democratic party that our parents and grandparents respected and believed in. we have an appalingly ignorant populace across this country that cannot understand simple math. you know, i can follow it.

but the vast majority do not follow the math. it is too complicated for them. if there was some way you could break it down fairly simple, we are spending $10 billion a day to operate our governmetn spending. guest: all of my charts and graphs are on my senate web page. that is exactly what we're trying to do. we are trying to lay this out in simple terms as possible to show the american people that punishing success does not work. let somebody else pay the price. but the fact is it will not work. information is powerful. you have to understand what works and does not work.

what the president needs to do is show the american public how he is going to close a trillion dollar a year deficit. he is not going to do it by closing eight% of that gap by punishing success. host: you have received some heat from some comments you made about the electorate. here is the headline from "the huffington post." guest: i never used that word. host: here is the quote they were referring to. guest: when you are saying just make the rich pay their fair

share and everything is going to be fixed, it is not going to be fixed. you increase taxes and raise $34 billion a year, at the most $80 billion for dividends and capital gains. it does not solve the problem. then president obama says a balanced approach. we understand where he is going to increase taxes. where is the other 92% of deficit reduction customer basically he sold the american people snake oil. people bought it. they elected this guy. he has passed a health care law which will be a disaster and has been under estimated in terms of its cost and its impact on the health care system. it is going to be dramatically bad. we are in this place right now.

president obama has no plan to invent it is his responsibility to lay his plan on the table and to show the american public how you are going to get the government to live within its means and balance the budget beyond test taxing the wealthy which at most will raise $80 billion. i am interested in seeing that plan.

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>> if you were a congressman, you would elect to have the trigger to talk about it every once in awhile. >> why do they not spend time doing something about it? >> to go back to the earlier question, given the state of the economy, it will take some time to get consensus. it will not be january 2013. it is going to be 2014, 2015 before that gets put in place. it is not easy to change the tax thing where you say to get rid of some deductions and

loopholes. they are there because people want them there. we ought to get rid of a lot of them. there is a big debate as to which ones to get rid of and how. to think you will resolve it in two weeks or six weeks is foolish. >> you mentioned taxes. one of the biggest debates going on is what to do about taxes on those above $250,000. one of my roles is to try to present various sides of the debate. there is a school of thought that it is the over $250,000 that are so-called job creators. if you increase taxes on those, you will have a significant effect on the economy. this is part of a larger question of how serious the effect is on the economy of

raising taxes. let's start with a narrow question. suppose taxes were increased for those above $250,000, but not the rest. what would you guess the effects would be? >> zero. >> that is a nice, clear number. >> i do not quite agree. we can decide the issue of the political notions of who should get taxed. there is no question the vast proportion of personal savings which is the bigger part of gross domestic savings in the economy are in the upper income groups. to the extent you increase taxes on them, you are essentially reducing savings.

the data are clear on this. savings are a necessary condition for capital investment and productivity growth. leaving aside the argument as to what extent the issue affects the economy directly through the so-called job creation, i do not look at it as a job creation issue. that is a secondary effect. i look at it as a problem -- there is one remarkable stability in the economy in the last 40 years. it is the sum of government social benefits to persons, and a gross domestic savings on the economy as the other. if you add them together, they have ranged from 26% to 20% of gdp going back to the mid

1960's, and what you see is dollar for dollar, as the increase in benefits rises, savings go down, and this fundamentally affects the long- term outlook. if you, for example, project the issue of savings continuing as a stable proportion of the gdp, which it had been from, say, 1983 back, and you look at the actual decline that is going on in savings, and you can attribute roughly to the spending rise, and that is the reason we have got to stop this extraordinary uncontrollable rise in spending. it is affecting our long-term growth, and the irony is, without the long-term growth, as i said before, you will not have the resources to make the benefits that are being created

by the congress, which are paper benefits. they do not create anything. they just get a right to get this targeted. >> if i understand your answers, paul would say if has zero effects. i am sure you would want to elaborate. >> i hear you saying why you do not like it. if it is part of a total

package, that gets at the spending problems. you think it is a price worth paying. >> absolutely. >> i do not think changing that particular tax rate at this particular time will have a big effect on the economy. overall, there is a good argument for keeping tax rates as low as possible and lower than the level at which we are in. that takes a lot of consideration of the total tax system and how you organize it. i would aim ultimately for a balanced budget, and you want for a lower level of spending as you can get by with. i do not know exactly what that is, but it is a good deal lower

than we have now. that is a fundamental problem, no question about it. then we have got to revise the tax system that will produce whatever it takes, 20%, 21%, 22% of gdp, and do that in the most efficient way it can be, and i think the present tax system is pretty well broken. i'm not sure we can rely so much on the income tax as we have in the past. we ought to begin looking at more consumption-oriented taxes. >> i agree with this. it is a terribly important point, because remember what taxation is for. it is to find the spending which we appropriate. spending comes first, and then you decide how much you need to raise in taxes. this notion that we can somehow manage the fact that taxes and spending do not go together has been a failure. we have tried it for years, and you have been arguing against the deficit. the reason, as you may recall, the general ethos in the united

states before i would say 1970's, or maybe even a little earlier than that, was the fact that the federal budget ought to be -- ought to have taxes equal to spending. i remember president eisenhower apologizing to the american people for a very small deficit. we got sophisticated with our macro economic models as how you can manipulate the economy by boosting fiscal policy. there is a terrible bias in the way the system works, which has led us to this fiscal cliff, which -- and without the debt ceiling. you have been railing against this, i regret to say, with no interest whatsoever, but we have come down to the point

where our very sophisticated economic policies have led us to this point, and i think the way paul put it is exactly right -- you decide what you need to do for spending and then you raise whatever is required to fund the fact. and stop with this business of we can do it, 3% of deficit, because it does not change the level of debt to gdp. that is factually correct, but it is irrelevant because if you do that, you will make -- you will not make that either, and that is what is happening. >> let me shift a little bit to europe and try to help me understand this situation. first, what lessons does the

european experience teach us, and, second, there are a few indications that maybe europe is coming up with some possible answers to their problems. what happens -- a lot of the money has been flowing out of the euro -- what are the chances that europeans might be getting their act together, and if they did, what effect would that have on us? >> do not think they are getting their act together. kicking the can down the road, what that is fundamentally doing is financing a very large part of the fiscal deficits of the 17 countries of the eurozone with central bank money. you can look at the size of the european central bank balance sheet, and last year it has gone up more than one trillion euros, funding essentially the deficits of the individual

countries by lending directly or essentially buying the bonds of the particular countries. there is no evidence that -- the greek situation is classic. i cannot imagine how the level of debt increases ever are to be paid off. the problem ultimately is that the guarantors in northern europe of some of the extraordinary behavior of the southern europeans is running into problems in the north, and i do not think this is coming- together. as i wrote in an article a year ago, i did an article in the "financial times," saying it is a cultural problem, and i think the euro is going to have great difficulty holding together. >> paul, do you want to add anything?

>> i hope it holds together, but it is a difficult road to follow. the levels of unemployment they have and some of the southern european countries, but i think the big lesson here is you refer to -- you have a situation where there was no restraint on greece and spain and italy and borrowing money cheaply partly because they were part of the eurozone and that failed provide the answers and they could borrow with the same industries as in germany. they borrowed and they got in trouble. they are small countries. the united states is a very big country, but we have some of that symptom, and we do not want to have the breakdown that they had in europe when they

reached the limits that the markets would take on their borrowing. the real lesson for us here is a fundamental lesson. >> i want to wrap this up a little bit. i want the two of you to play god for a moment. >> just play? >> perhaps you are already in that state. we have outlined today's challenges, short term, long term, and so forth. if the president were to call you in the oval office and say, ok, all things considered, what should i do, what would you have him do? >> i would like paul to answer that one first. >> as to what to do with this untenable situation, that sequester, they need to do a short-term deal, do the hard work, and deal with the tax

system, and you got to look at social security, medicare, and what can you do that is convincing in terms of the other expenditures over a period of time. that is a very tough thing, but is there consensus on the broad level of spending that we are willing to pay for in taxes? i am afraid that is more than 20%, which is what the historical relationship has been to gdp, but i do not know if it has to be much above that, but that is the question. >> alan? >> well, everyone is saying the right thing, so to speak. both the white house and congress. they have been saying the right thing for a long time, but nothing has happened. i basically say unless and until we literally decide that we are willing to forgo some of

our privileges on both sides of the aisle, we can talk -- we can posture as much as we would like, but it will not make any difference. you have got to act. the markets -- let me say this -- on september 14 -- i am sorry -- a program shortly after simpson-bowles was announced, i was asked -- barely understood that it had just come out -- whether simpson-bowles would be usable by the congress, and i said that simpson-bowles is what will ultimately pass, and the only question is whether it is before or after a crisis. i still hold to that view. >> ok. i have raised a lot of

questions. what should i have asked that i did not? >> you are always comprehensive. [laughter] >> is that what this conference is all about? >> i would be thrilled if that were the case. all right, please thank these two. [applause] very well done. >> the challenge is clear. be have to focus on accelerating the economy and the job growth. that means avoiding the fiscal cliff.

be to talk about the payroll tax component of that which is significant and is not in a part of the conversation. i believe we should look at a one-year extension of either that or some other mechanism that delivers the same economic benefit kerry >> $95 billion, the price tag for that. the goal here is to bring this deficit down. >> the goal is to make sure we do nothing to harm the fragile economic recovery. that would be the worst thing in the short term. than to lock in a long-term path to credible, stable deficit reduction. we are trying to accomplish two things at once make sure we do not do anything in the short term to place a drag on the economy where we should take measures to boost the fragile economy. >> how much latitude as the president have now in terms of negotiations? he is getting pressure from

democrats and republicans but with in the democratic party and congressional leadership, does he have a free hand to talk about difficult things like, for example, scaling back medicare? >> the president has the confidence of the democratic caucus in the house and senate. that -- that does not mean there is a blank check. everyone will want to make sure they are representing their constituents in the best way. there is a consensus the president has laid out the challenge clearly. the president has pointed out the approach he has taken was not some secret during the campaign. the president was one person who was absolutely transparent about how he would approach these issues and laid out a revenue plan in terms of

allowing the top rate for high- income individuals to return to clinton era individuals. he also had a tax reform component that lower the value of deductions, and a pretty clean way by dropping the valley of deductions to 28%. he has put a plan on the table. we have done really heard a plan from the republican colleagues. we heard a good tone from speaker banner, but not any particular plan. with respect to the other issues, the approach we believe we should take to health care and medicare -- the reality is the per capita increased in cost and the health-care system runs slightly higher than the medicare system. simply transferring costs onto individual was did not address the fundamental problem. building on the fundamental reforms to took on the affordable care act which is to move away from a strict fee- for-service system is the better

way to go. >> let me run a couple of ideas past due that i could not get the gene to bite on entirely. raising the trigger for those earning $1 million a year may to $500,000 a year. what do you think about that? how will that play in the caucus? >> i think people will consider various options. the fundamental issue is to make sure we boost job growth but also make sure we are on a plan to deficit reduction. what is the revenue to cut it makes. if you look at the simpson goals plan =-- simpson bowles plan,

the reality is, the revenue is more the what the president has put on the table even at the $1.60 trillion number. it is important to everyone recognized that. if our goal is deficit reduction as a long-term goal -- what we have to decide upfront is how we will get the revenue and how we will get the cuts. the issue off with going to a $1 million threshold is that means less revenue coming in over the next 10 years to try to hit that target. where will you make of the revenue? he will have to find somewhere else if you are going to take that a balanced approach to long-term deficit reduction. >> 1 1/6 dollars trillion. is that a target that you think is the right target? >> i do.

i think that is the right target. i emphasize the fact that the some symbols from mark -- i think they have a good framework in the sense they have the right ratio of cuts to ratio recognizing their estimate included a denture they're starting. the amount of revenue you would receive -- in they're starting point when back to the revenue you would receive at the clinton era. that is why they get the deficit reduction numbers that they do. if he were to take up the assumption, they are about $1 trillion short on their targets. that is an important piece of their plan. the president's proposal comes a little bit less on revenue. i think $1.60 trillion is a good target. a little bit less than simpson bowles. his plan has the right balance. >> there have been some democrats that said the negotiating position would be

enhanced if we went over the cliff. >> i do not think we want to go over the cliff. we are trying to avoid going over the cliff. the real issue is whether republican colleagues are willing to make the tough decisions before january 1, or whether they will only face those decisions after january 1. the president has laid out a clear plan, and not just since the election but before the election, about how to get there. when i say he has set the right tone, let's see the substance. the president has been transparent. let's see what the speaker is proposing. if it does not hit those targets, then we are not going to be able to accomplish our goal of long-term deficit reduction. it would be really bad if we

kicked the can down the road again. between what happens in the next six weeks and what happens over six months in structured way, we have to lock and assurances that we are going to accomplish those dual goals. job growth and a sustainable credible path to a long-term deficit reduction. >> what role are markets playing in this election right now? obviously, there are some investors out there -- maybe it is not all tied to the fiscal clift -- there are investors that are nervous. >> there are lots of factors that go into the nervousness in the stock market. there are these twin objectives, both weighing on people's minds. people do not want to much deficit reduction right now. it would have a negative impact